3/2 in Sanford, NC - Tear it apart!

[Kerry Smith]

Hey gang, considering this 3/2 in Sanford, NC. Looking to do an advanced cosmetic/partial mechanical rehab on it.

Here are the details:

• Beds: 3 Bed
• Baths: 2 Full Bath
• House Size: 1,634 Sq Ft
• Property Type: Single Family Home
• Year Built: 1964
• List Price: $39,500

Plan going in -
#1 - Buy & Hold
#2 - Resell for profit
#3 - Lease option

FARV (Fast Sell After Repair Value) $110,000

Going to offer $25,000, looking to get it for $30,000

Estimating $40,000 in repairs (roof, siding, HVAC etc)

Total project cost $70,000

Down payment $21,000 (30%)

Expected Rents $900 (Based on numbers from Zilpsy, Rentometer, Zillow and test Craigslist ads)

Breakdown of monthly expenses -

Total operating expenses: $380.00

Mortgage expenses: $278.22

Repairs: $90.00

CapEx: $90.00

Insurance: $60.00

Management: $90.00

Monthly P&I: $278.22

Property Taxes: $50.00

Total Monthly Income:$900.00

x50% for Expenses:

$450.00

Monthly Payment/Interest Payment:

$278.22

Total Monthly Cashflow using 50% Rule:

$171.78

Looks like almost a 9% Cap Rate, and 12% ROI. I'd like the Cap Rate to be higher, but the rents are low in our neck of the woods. Please tell me what you think, all feedback welcome!

Thank you!