Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 10 years ago on . Most recent reply

User Stats

7
Posts
3
Votes
Ryan Tyler
  • Delray Beach, FL
3
Votes |
7
Posts

Florida First Deal Analysis

Ryan Tyler
  • Delray Beach, FL
Posted

My mother owns a duplex in Central Florida, and she wants to give it to me in exchange for paying future property taxes. Caveat is that I can't sell it b/c it is next to my parents house and they dont want it to leave the family.

I have a little more than 12k to spend on repairing the property. Say it takes 10K to fully repair (estimate based on comps in the area). Consideration for the property is $1.

House is valued at 47k about 3 years ago. I am going to rent it to HUD/Section 8 says that renting both sides of the property will be capped at 500 each side. Below are my numbers (I ran the numbers as if I am financing the 10k through HUD at a 30 term, although I'm just losing potential interest 2-4%)

Purchase Price $10,000.00
     
Home Value     $47,500.00
     
Interest Rate     3.5%
Down Payment 6.00% of the purchase price $600.00
Amount Financed $9,750.00
     
Income      
Rent     $1,000.00
Other Income     0
Capital Appreciation Rate -1.60% per year of home value $46,740.00
Total Income $1,000.00
     
Expenses      
Mortgage 30 year term $27.08
Taxes 1.05% of value of home $41.56
Insurance     $100.00
Flood Insurance      
Repairs 10% of the mortgage $100.00
Vacancy 10% of the monthly rent $100.00
Capital Expenditures 10% of the monthly rent $100.00
Water   Tenant pays $0.00
Sewer   Tenant pays $0.00
Garbage   Tenant pays $0.00
Gas   Tenant pays $0.00
Electricity   Tenant pays $0.00
HOA Fees   Flat
Lawn Care     $25.00
Property Management     $110.00
Total Expenses $603.65
     
Cash Flow $396.35
Cash on Cash Return on Investment 66.06%
Annual NOI     $4,756.25
Cap Rate     792.71%

Am I missing something critical? The HUD waiting list is packed in the area, but should I account for more vacancy? Repairs? I can't believe that the cap rate could be that high.

I whipped up my own spreadsheet, so I could understand the numbers. I need someone to (gently) pop my bubble here. I have a property management company in mind, plus I have a nephew that will mow the lawn once every two weeks.

Loading replies...