Deal Analysis Training - Athens, GA

[Joseph Hoot]

Hi BP Community!

I'm trying to get a better handle on property analysis and adjustments that I should be making when analyzing a deal.  I'd like to take this property as an example and see what input others have:

I use a tool called "Property Evaluator" on my iPhone.  I really like this tool.  I know there are many others out there.  But here are the screenshots from the calculations it gives me:

Questions & Comments:

1. Assumptions:
   • Given the last image, do those seem like fair numbers to be using?  $417 is about 42% of income.  But given the 50% rule, it is close.  Are there any other expenses I should be accounting for?
   • I also like the idea of assuming the property is being managed.  So 10% added on for that.
2. Mortgage:
   • At first thought, I wanted to use a 10yr or 15yr mortgage to not have to pay as much in interest.  But then, after thinking about it more, my tenants would be paying for the P&I.  In that case, wouldn't it be better to take out 30yr mortgages so I could have more cash on hand to use for downpayments on more properties (where other tenants could be paying down those P&I's)?
3. With a 30yr mortgage, the Cash Flow seems pretty good to me. I heard Brandon Turner talk about preferring 15-20% CoC and getting >=$100/month on cash flow. I think this fits that.
4. I haven't compared comps yet, but would normally I would go to Zillow for prices of similar homes sold in the 1-3 mile area (maybe more, if necessary).  But I have a sense that this may be a fair asking price.
5. I would normally also probably go to things like rentometer, apartments.com, zillow, and not sure what other sites to see if what the listing says about $500/month is normal for that area.
6. I'd probably then double-check to validate with the county website to verify taxes have been paid.
7. And I would certainly want to touch base with the listing agent/owner to understand if they could supply a rent roll, utility costs, better understanding of who pays for what, how long the leases are good through, if any new CapEx-related equipment was purchased recently (or how old this stuff is). But other than that, does anyone see any other things that I should be looking into?

Overall, this seems like it might be an okay deal.  Based on my understanding above, I think I would probably be willing to make offers up to about $60,000 (I'm not at this point yet, so others feel free to jump on this).  

Does anyone see anything I'm missing?  I have no doubt that there are plenty of other things I should be considering when looking for a property.  But I'm hoping to hear some constructive feedback on how others might addon to what I'm looking at here.

What do others think?