Is This Turkey Property A Good Deal?

[Marlene Goldenberg]

Hi Everyone,

We are about to purchase our first turnkey property, but I would love to get feedback on whether you feel these numbers are accurate and whether the house is a good buy.  This company sells the house at the beginning, and we would pay for the rehab, carrying costs, etc.  After the rehab, the company finds a tenant, and then we can refinance and pull 70-80% of the equity out depending on which lender we work with.

The information we received is below.  

Address: 4363 North 62nd Street, Milwaukee, WI 53216

Price: $59,000

Rehab: $22,000 

Carrying Costs: $1,000

Closing Costs: $2,000

Total Turnkey Price: $84,000

Estimated ARV: $87,000

Rental Projections:

Monthly Rent: $1,075

Taxes: $183

Management (8%): $86

Vacancy: $54

Insurance: $88

Reserve: $54

Mortgage Payment (Assuming a 5% interest rate on a 25 year note): $355.14

Net Cash Flow: $355.14

Net Annual Cash Flow: $3,071

Cash on Cash Return: $15.17%

Thanks in advance for your feedback!