Analyzing this deal: $53K for $750 rent

[Travis Washington]

Greetings BP,

Currently have a property under contract that is a 3/1 on the skirts of an established town.  Below are the numbers:

-Price: $53K

-Recently updated (before listing; turnkey property)

-"Zestimate" at $57K

-Sight unseen but trustworthy Turnkey company has brought it to me and ensured its solid

-Inspection this week to confirm condition 

-Dwn Pmt: 15% down ($7,950)

-Mgt Rate: 5% fixed 30-year

-Estimating $2k for closing cost

-And another $1k for possible repairs following the inspection

-Rent market: $750/month ($800 could possibly be pulled too)

-2014 Taxes were $733 ($61/mth)

-Using the 50% rule I get $750/2= $375. Then minus the PITI I end up with $375-$242= $133 of cash flow.

-Estimating 8% for vacancy loss, 10% for PM, 10% for Taxes and Fees, and 22% for CAPEX…for a total of 50% of income.

-Total initial investment: $11k

-Projected Annual Rental income: $9k

-Projected Annual Expenses: $7.5k

-Projected Annual Cash Flow: $1.5k

-Property is in Indianapolis market just outside of Irvington (for those familiar with the area)

-3/1--1500sqft--additional 1000sqft unfinished basement--2-car garage--built in 1923 

How solid of a deal is this property as a buy and hold?

Is their anything above that I am missing or need to adjust with the analyzation of this property?

And what should a young investor as myself focus on going forward with the inspection and closing?

Thanks for the advice!

[Frank Jiang]

Double check your tax number.  Indy taxes non-owner occupied at a higher rate than owner occupied.  If your original estimate is based on an owner occupied rate, you may be unpleasantly surprised down the road.