First Rental Property Under The Belt

[Brennen Cook]

Hey Everyone,

Let me get the into over fast so we can get to the deal. I found bigger pockets a little over a year ago and it has been AMAZING to say the least. I've learned a vast majority of what I understand now about investing directly or indirectly through this forum. I have been fortunate enough to play hard money lender and shadow a flip, while currently having another flip for sale on the market. Both of which will make decent returns. With that said, I have learned that I like to focus on the numbers. I have started to find I can make some of the same returns in my market ( Greater Sacramento Area ) in rental properties as I can in the flipping market... Or maybe this one happens to be a good one... or maybe not.

Here is the run down... I am posting 1: To share and learn myself and 2:Allow others to learn from others deals as I did.

Two Duplexes on 1 Lot - (4) 2/1 800 Square Feet

Purchase Price: $150,000                  Down Payment: $25k                $125,000 @ 5%for15

Monthly Rental Income: $2275                  Gross Rents: $27300

Operating Expenses(Taxes,Insurance,Vacancy Allowance, Repair Allowance

$4,596 Annually

Net Operating Income: $22,704

Debt Service (Mortgage): $11,861.76

Cash flow: 10,842.24

Cap Rate: 15.14%

Cash on Cash: 43.37%

I am honestly a little loose on the Expenses. for example only 5% for vacancy considering 3/4 tenants have been in unit for over 3 years. I pay my insurance yearly so I know the cost obviously. This property was seller financed. It has much deferred maintenance. I have had a VERY THOROUGH ( and COSTLY) inspection done and I actually have a bid (from my contractor )for a complete blow out rehab... Oh and by the way.. After closing I am only out of pocket $23K and some change because of pro-rated rents.

I know this not a A class property, but is this a home run real or is it just me? Dont be afraid to burst my bubble! =P Constructive criticism welcome! Hope I didnt forget anything!

Thanks BP!