Can somebody check my numbers?

[Daniel Karbownik]

I'm in attorney review on my first rental (SFR), as a no-money down deal! (I have a private investor willing to finance me on 100% of the purchase price) Very exciting. I have been on BP for a while now and I've run numbers on a ton of deals and have a pretty decent understanding. I thought I would get a reality check on my deal here since it's actually happening now. Please let me know if these numbers make sense as a good deal:

Purchase Price:  $155k

Expenses:

• Taxes:  3,439
• Insurance:  900
• Maintenance:  1,200
• Vacancy:  1,038
• Total Yearly Expenses:  $6,577
• Total Monthly:  $548

Financing:

• $155k, 30 yrs, 5% = $832/month

Expenses + Debt = $1,380/month

Income:  Property comes with tenants paying $1,500/month

CashFlow:  $120/month

NOI (without debt): 18,000 - 6,577 = $11,423

Cap Rate:  11,423/155,000 = 7.37%  In this particular town, 7+% is very hard to come by

I also believe the current rent is below market, and has potential to raise to 1550 or more.  I also have more than enough reserves to comfortably stash 8 months of expenses aside in the event of vacancies.

Since my investor is an older gentleman and looking to secure himself some passive income for a while, part of our private mortgage deal was that I can't refinance before 10 years, but also that I must refinance before 15 years.  I also do not have to personally guarantee the loan - this was OK with him since he is also a real estate investor himself and doesn't have a problem with foreclosing the asset in the event of a default (another rental for him).  

How did I do BP?  

[Kevin Zimmer]

Daniel, nice to see you on BP.If you have run numbers on tons of deals your gut should start letting you know what is good. No money down, an unsecured note, and $120/ month cash flow?An infinite ROI!I did not see a number for property management, or are capital costs and PM grouped into maintenance?

Are closing costs built into your purchase price, and/or have you accounted for them separately?Is 155k market price or discounted.If market is the area appreciating or at least stable (I’m thinking yes since you said a 7% cap rate is good)

How did you come up with your expenses number? Is there any deferred maintenance? How long have the tenants been there, and can the seller document the payment history?How many months are left on the lease?

I am not suggesting you over analyze this.I think you should pull the trigger.