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Updated about 7 years ago on . Most recent reply

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13
Posts
1
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Wesley Clark
  • West Deptford, NJ
1
Votes |
13
Posts

First Deal Analysis in Jersey

Wesley Clark
  • West Deptford, NJ
Posted

Hello BP - looking for assistance in analyzing my first deal. I just put it through the rental calculator and BRRRR calculator and it does not look promising from a Cash on Cash return perspective. I'm wondering if SFR in my area based on taxes etc are just out of reach or if I am being too conservative in my numbers.

Currently approved for a Fannie May loan which buddles renovation into the purchase price.

3BR / 1BA SFR

List - $111k

ARV - $150k

Assumed purchase price - $80k

Reno - $17k-$20k

$14.5k down

$4.5k taxes

$55PMI

$6k closing

5% interest, 30 years, 1.2 points

$1,400/mon conservative rent projection.  Would likely start at $1,600 but comfortable I could get $1,400.

Lender quote of expenses at $80k purchase price is $975-$1,000 month.  When I account for vacancy, repairs, capex and prop management it pushes me into a flat or negative cash flow projection plus alot of upfront cash.  Am I right to walk away or am I just too conservative on this one and hoping to land the perfect deal....

Thank you all

Most Popular Reply

User Stats

1,405
Posts
864
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John Leavelle
  • Investor
  • La Vernia, TX
864
Votes |
1,405
Posts
John Leavelle
  • Investor
  • La Vernia, TX
Replied

Howdy @Wesley Clark

This is very simple to determine based on the numbers you provide.

Income $1,400

Expenses $700 (50% rule). Since you did not provide much here.

P&I $975

Cash Flow. - $275

Why would you want a rental property that you lose $275 every month?

Run....... don’t walk away from this deal.

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