First Investment Property - Tenant moved in!!

[Rodney Kuhl]

I had previously posted on here asking BPers for advice on a potential rental property. I decided to purchase the property. Here are the numbers I posted when asking for advice:

Asking price: $50,000
Tax assessed value:$57,500
Down payment: $10,000 (20%) -- seller paying all closing costs
Rehab: $1,000 (really just needs floors vacuumed/scrubbed and stove + fridge)
Total initial investment: $11,000

Projected rent: $775/mo
Vacancy factor (10%): $77.50/mo
Total Income: $697.50/mo

Property Management (10%): $77.50/mo
Maintenance (10%): $77.50/mo
Legal: $25/mo
Taxes (capped at 2% of purchase price): $83.33/mo
Insurance: $45/mo
Total Expenses: $308.33/mo
Net Operating Income: $389/mo --- $4,670/yr

30-year Mortgage at 5.5%
Debt Service: $227.12
Net Cash Flow: $162/mo --- $1,944/yr

Cap Rate: 9%
Cash-on-Cash Returns: 18%

I ended up purchasing the property for $47,500 and paid closing costs. After closing costs, holding costs, and the down payment, I am all in at $12,188. I purchased the property expecting to get $775/mo, but I just rented the house for $825/mo, have secured an $825 security deposit, received the 1st month's rent check for $825, and the tenant has moved in!

I also decided to manage the property myself as I see it as a good learning experience, and with only one property I should be able to handle managing the property. Also, my PITI is actually only $360/mo.

With everything else staying the same, I am projected for cash flow of $275/mo, and cash-on-cash returns of 27%!!

I know this is something many of you see on every deal, or maybe even better. But I'm pretty excited about my first property!

Thanks BP for your help in analyzing the deal! Can't wait to do more!