Sub2 Rental Property, Post Purchase Eval

[Michael Moikeha]

7 bed 3 bath, 3300 sqft, 1/3 of an acre. Portland Metro Area

Currently Value - $295,000

ARV - $312,000

Purchase Price - $282,000

Sub2 Current Mortgage - $252,000

Down Payment - $10,000

Payments to Seller - $20,000 paid over 4 years starting a year after purchase.

PITI - $1900

Rent - $2700

Money to renovate - $1000

Time from purchase to moving renters in - Zero (replacing flooring in 2 bedrooms after tenants moved in)

$500 reserves for repairs, vacancies, and capital expenses.

$300 cashflow.

Plan - 

I plan to hold this property for a very long time. I was not as worried about the purchase price vs the current value as the property cash flowed well, rented easily, and the land would be valuable in 5-10 years when the zoning changes, as the lots boarding on 2 sides have already been re-zoned. If it doesn't change, it still cashflows well and to me, an asset adds value and adds cashflow therefore it was a good purchase. Worse case scenario, I move in myself and rent some rooms out because I love the property!

I am interested in hearing some opinions on this breakdown. At first glance it doesn't seem to pencil, but only paying $10,000 down on a property that cashflows amazingly for this market, and the push for density, I found value in it.

Looking forward to hearing some input.