Analyzing My First Deal

[Raymond Y.]

Noobie from New Jersey here. I am interested in the Allentown area and wanted to get the locals to check my numbers. Lately, I have been checking on Zillow to understand the market and I found this one that looks like an okay deal. I am still getting up to speed on everything, so most likely I am going to pass on this unless this is a home run deal.

Notes:

Listed at 50k and for this purpose, I am assuming I can get the price down to $40k

20k repairs: From the pictures, it seems like everything is in good shape and just needs some touch-up.

$80k ARV: based on what other properties are selling for on Zillow after filtering for similar sq footage and bedrooms

1k rent: Seems like a fair conservative rate 

Property tax: pulled from the county's website

Vacancy/repairs/property manager - Are these amounts standard?

Insurance - I pulled this number out of thin air. What should I be expecting?

Thanks in advance for anyone that takes their time to look through my analysis!

Home in discussion:

https://www.zillow.com/homes/for_sale/Allentown-PA...

[Charles McCabe]

"Vacancy/repairs/property manager - Are these amounts standard?"

Depends ; >  Vacancy is different for every market.  5-10% seems typical.  I use %5 in my area.  I use 10% of rents in my calculations for maintenance; just keep in mind that those are going to be "lumpy" expenses.  Property management, as I understand, goes for 8-12% of rents, depending on market and the number of properties under management.  I use %8 in my calculations because I'm pretty sure that I'll be able to get it down that low by the time I decide to have someone else manage for me.

"Insurance - I pulled this number out of thin air. What should I be expecting?"

Depends ; >  I use either $1500 or $2000 in my market for budgetary purposes.  $2000 if it's a very old property (there are a lot of turn-of-the-century houses in my target area) or a very big one.  That being said, insurance may be way lower (I'm only paying about $800 on one) or way higher (e.g. coastal property).  You should be able to get that property insured for under $1500, even built in 1880.

Thanks,

Chaz