Good investment? If so, what’s next step?

[Josh Perkey]

Hello all,

I’ve been very interested in getting started in real estate! I don’t have any experience as of right now but I have been doing a lot of research and have located a property near my university that has solid marks and would like some guidance. Thank you in advance!

The Property

Asking price: $115,000

Bedrooms: 6

Bathrooms: 2

SQFT: 2500

It’s currently renting at $2500

Taxes: $118/month

Estimations:

Rehab: $25000

Insurance: 5% of rent

Vacancy: 5% of rent

Repairs & Maintenance: 10% of rent

Capex: 7% rent

Utilities: 10% of rent

PM: 10% of rent

Cash flow: $791 a month

Cap rate: 10%

I haven’t gotten an inspection yet and have no idea what that would look like. The pictures show it pretty much needs a full renovation, although it’s a college town house so it doesn’t need to be the cream of the crop. I drove passed the property and looks like a new roof will need to be done in the next 3 years. I plan on doing the rehab myself as I have done some of this work and have a friend who flipped a house in the same area this past summer. Who is willing to help with everything. After rehab I think I could expect $2750 a month at the least from the 6 bedrooms even including utilities.

My questions are: 1) Do my calculations look correct? Like are my estimations per month accurate?

2) What would be the next step to take assuming these calculations are correct?

Thank you all so much in advance!