Deal advise - recast in future for cash flow?

[Michael Storch]

Hey everyone,

I am under contract on a sfh property in the Cleveland area. I spent a bunch of time looking and running numbers before this, and I happened to be in the area the day this listed.

It’s a 3 bed, 2.5 bath 2000 sf home with a basement that is mostly finished but needs An egress window to become a 4 bed.

Everything looked good and I moved fast and got under contract at 250k. At the moment, it seemed like a 270k home and becoming a 4 bed, would be a 300k home.

My issue is figuring out how to cash flow it.

It’s hard to get accurate numbers with Cleveland properties ranging in quality. I secured a 250k physician loan (no money down) at 7%, which brings payments to 1707/month, and 1887 with insurance and taxes.

My agents comps showed the home being 260k-300k, and they were confident rent could be over 2400.

What should I do for cash flowing this in the future? Is saving money and recasting 30 or 40k to bring payment down to 1300-1400 worth it? The cash flow numbers are tight at 7%.

Thanks!