Deal Analysis help in Houston

[Mike Peel]

Morning everyone! I am looking into a turnkey 3/2 SF Home (1440sqft) with a detached studio garage apartment(400sq ft) in Houston. Below is what I compiled. Is there anything I am missing? Anyone have comments on the deal? Anything I calculated wrong? This will be my first real estate investment. House Purchase Price 121,351 20% down for loan 24270.20 Mortgage Balance 97080.8 Mortgage % 4.5% Term (years) 30 Mortgage Payment $491.89 Tax Payment $ 272.73 Home Insurance. $83.33 Total Fixed Cost $ 847.96 Estimated Repairs 120 Total Fixed/Variable Cost $ 967.99 Potential Rent 1800 (1200 sfh, 600 studio) Vacancy Rate (10%) 120 Net Income $1,680.00 NOI $14,447.19 Cash Flow $8,544.46 Cap Rate 11.91%

[Mike Gennaro]

Hey Mike,

You're numbers look good. There are always variables, but you did a good job setting yourself up for success. Also, you are buying at a strategic time, when many responsible tenants move to ensure they are settled in for their or their children's upcoming school year.

How desirable is this location? If you are saying you are renting the main house and studio separately, your rent expectations may be set a little high, but maybe you'll prove me wrong. Figuring that the main house would be worth 100K and the studio worth 20K, consider setting a minimum rent projection of $1000-$1100 for the main house and $200-400 for the smaller studio. If you are getting a lot of inquiries about the house and no signed lease agreements, then you'll know that you're probably asking too much. Whatever the asking rent is, make sure you don't rush the process but do a diligent job screening your first tenant. BP has many resources to help you with this.

Have you compared your rent projections to actual rents that other houses are going for in this area?

Best and remember to create your own luck!

Mike Gennaro