FL Condo Deal, Would You Take it?

[Nathan E.]

I have a verbal contract for a 2 br 1 bath condo. This is my first investment property purchase so I am analyzing the heck out of it and looking for advice from the experienced community.

Purchase Price: 65,500

Income: currently at $750 lease through Oct. Rentometer and research suggests that this is low. I can get 800-850 for this unit.

Expenses: Taxes:850; Assoc Fee: 840/yr; self managed.

Repairs: The property looks good, but I have yet to do an inspection. It looks to have had tile floors and paint and appliances not too long ago. I am assuming only regular maintenance costs 5-10%/year.

Financing: The seller is offering financing. I am looking at a 25% down, 6% interest, 40 year amortizing loan for a payment of $270/mo.

Thanks in advance for your input.

Nate

[Account Closed]

Nathan. There is no such thing as a "good" cap rate. Also cap rates are not appropriate for small residential properties because where would you get reliable cap rate comps? Cap rates are only to see what the market is doing. It does not predict profitability.