Class C Property - Deal

[Matt Stambaugh]

Just wanted thoughts on this deal. SFH 3/2 - It's a tougher part of town, higher crime rates, median household income of $30k, 48% of homes are rentals with a high participation from the national property inv co's.

Property needs no work. Rents range from $825-$925. I'm using $875 below.   Value is approximately $75k.  Owners are not local  and don't want to deal with tenants.  Sellers are kicking in $1200 to closing as well.  I'm getting 30 yr $ at 4.5%.

Purchase Price -$61k

Gross Rental Income- $10,500

Operating Expense- $4,725(45%)

NOI - $5,775

Debt Service (P&I only) - $2,782

Cash flow - $2,993

Debt Service Coverage - 2.08

Cap rate - 9.5%

Cash on Cash - 38%