Condo rental

[Kelly R.]

Hello everyone,

During my brief time here I have tried to absorb as much as possible.  I understand a lot of you are not thrilled with Condo investments but I wanted to run this one past you.

Purchase price is $80,000, 2 bedroom, 2 bathroom, corner unit top (4th) floor, 1 car garage and storage unit. Looks to be in great condition. Built in 1998 across the street from a school.

I could self finance but ran the calculations on 20% down at 4%.

Rent is 1400 - 1500, I used 1450.  The property has a rental history.

Monthly expenses = 830

Monthly cash flow = 619

Pro Forma Cap Rate = 13.50%

Purchase cap rate = 13.74%

Cash on Cash ROI - 40.85%

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Financial Projections

Total Initial Equity:

$16,000.00

Gross Rent Multiplier:

4.64

Income-Expense Ratio (2% Rule):

1.76%

ARV based on Cap Rate:

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50% Rule Cash Flow Estimates

Total Monthly Income:

$1,450.00

x50% for Expenses:

$725.00

Monthly Payment/Interest Payment:

$305.55

Total Monthly Cash-flow using 50% Rule:

$419.45

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It seems like a good deal but I am a newbie!  LOL

Thank you for the help