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Updated almost 10 years ago on . Most recent reply
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Show me what I did wrong
Hello Bigger Pockets, I'm looking for my first deal but before I jump into something I want to get better at analysis of properties. So here is what I got for a 1,218 sq. ft. home in Mississippi. Its 3 bed 2 bath, on .34 acres built in 1963. It needs new central air, exterior paint, irrigation of the back yard, it floods in bad rain. Foundation is sound, new cabinets/stove/etc in the kitchen. Possibly an upgraded vanity in the bathrooms but those aren't necessary. Here are the numbers that I have come across.
Cost: $43,000 (foreclosure) 20% down payment: 8,600
Closing Costs: not sure
Repairs: $10,000-15,000
Yearly expenses:
(I got these from Zillow since I wasn't sure how to estimate tax/payment etc. County tax rate is not available online.)
principal: 960 Interest: 960 Taxes: 516 Insurance: 804
Property Management, Repairs/Maintenance, Capital Expense, Vacancy rate: 840 yearly each. Figuring each at 10% of the rental income.
Rental Income: 8400 a year at 700 a month. This is low for the area. Could be increased another 50-100 a month.
NOI: 4236
COC: 5.6%
ROI: 2.4%
Cap Rate: 10%
Cash Flow: $1044
Does any of this sound correct? Am I missing anything? I'm not planning on buying this place, just trying to get the hang on analyzing properties right now. Thanks for any help.