SFH turnkey in Kansas City - deal or no deal?

[Julie McCoy]

Hey all, 

I've been in discussion with a reputable KCMO turnkey operator over a house they only closed on this week - love everything about the property, but just got the offer numbers and now I'm not so sure.  

Location: Raytown-adjacent, outside the 435 loop, 73% owner-occupied neighborhood, Raytown schools

Property specifics: built 1960, 3/2, 1200sqft, 2 car garage, large lot, quiet street

Planned renovations: New roof, HVAC, some new electric, finished basement, good cosmetic finishes (hardwood/tile, granite, etc)

NUMBERS:

Price: $99k (after renovations)

Projected rent: $1100/mo

Estimated monthly expenses: ~$400 (allowing for vacancy, maintenance, taxes, insurance, PM fees)

I'd use leverage to purchase, and with the payment factored in I project just under $300/mo cash flow and about 11% COC, Cap rate between 8-8.5% depending on how you crunch the numbers (I'm rounding them for the purposes of this post, but I calculate pretty conservatively).

The numbers are decent, and I like that this house is on the higher end of neighborhood normal - it should be a very desirable rental, and attractive to a potential future buyer (though I intend to hold).  My big concern: the price of $99k is well above the comps in the area (there aren't many, but similar properties are $70-85k). 

I welcome your input!