Buy and Hold #25 Under Handshake Contract
I met with my mortgage broker earlier this week to do a refi on my primary, and lo and behold, he had a house to sell me. It was not quite my ideal house, only 2 bedrooms, no garage, no basement, but he offered me land contract terms and only 15% down so it was hard to pass up. Definitely not a home run, but a solid double. Before someone asks here are the numbers. $55,000 with $8,250 down, $46,750 note at 5.5% amortized for 30 with a baloon in 10. I wouldn't have paid more than $45k for the house with cash, but the terms were worth another $10k to me.
Gross Scheduled Rent $9600
Vacancy 10% 960
Net Rent 8640
Insurance 375
Management 900 (though I do self manage for now)
Taxes 1200
Repairs, Capex, & misc. 1500
NOI $4665
Principle and Int. $3180
Annual Cash Flow $1485 (Or $2385 with management figured back)
Cash on cash 18% (Or 29% with management figured back)
It's in Madison Heights, within a half mile of 7 of my other rentals. The only part I wasn't thrilled with was the balloon, but I guess I have nine years before I have to worry about that.
Most Popular Reply
I cant get past the $100 or so per month cash flow. Is that typical for that area? I spend more than that on booze in a month. You put $8K down so its going to take you 7 years to get your money back.