Feedback on Condo in San Marcos, TX

[Henry L.]

Everyone:  I'm looking at a 2 bed, 2 bath condo in San Marcos, TX, and I was wondering if you could give me your opinions on this deal.  San Marcos is an extremely hot market, with tons of offers for most listings, and very little inventory overall.  Even though it seems like it's not a good deal, I want to ask if I'm thinking about things in the right way.

Overall: It seems like it's not a good deal at all. Is there a feature in BP where it could automatically tell you -- if the purchase price were lowered to $X, then it would be a good deal, e.g. meet the 1% rule, meet a 10% cap rate, or meet 10% Cash on Cash ROI.

Here are the details:

1) Purchase Price:  $112.5K, but I think there will be multiple offers.

2) Location: Great!  Very close to the university and supermarket, and right on a major bus route.  Comps -- I'm not sure why 2 Br rentals only go for $950 around this area, but that's what Craigslist shows.

3) Questions:  

a. How much would you estimate repairs to be for water damage to one ceiling?  I estimated $1000?

b. Since it's a condo, I've estimated capex to be 2%, is that right?  Should I also lower yearly repairs from 5% to something lower?

c. Anyone know the normal cap rate for condos in central Texas?

d. Am I doing anything else wrong?

e. Is the general advice to stay away from hot markets unless the numbers really work out well, even though it's very difficult to get good numbers?  

Analysis:  

4) Assumptions: