Help Analyzing this deal

[Abdul Azeez]

Folks - Need help analyzing the following deal as a beginning investor to know if I am doing this the right way. The property is http://www.zillow.com/homedetails/6-Pine-Lane-FL-2... The current renter pays $1200. I ran the numbers and they turn up as follows.

Taxes = $233

Insurance = $50 (assumption)

Vacancy = $60 (5% of rent)

Repairs = $60 (5% of rent )

CAPEX = $60 (5% of rent)

HOA = $386

Property Management = $110

Total Expenses = $980

The property is listed for $78,000. Assuming a 20% downpayment and a loan of $62,400, a 15 year mortgage at 2.78% will result in a payment of $424 per month and a 30 year mortgage at 3.52% will result in a payment of $280 per month. So, my Net operating income assuming a $1200 rent = -$204 ($1200 - $1404) for a 15 year mortgage or -$60 ($1200-1260) for a 30 year mortgage. 

So, would it be fair to say based on my simplistic analysis that this is not a good investment property?

Regards,

Azeez

[Shawn Rasmussen]

Hi Azeez. I too am looking for my first investment property. I'm estimating vacancy and CapEx at 10% each. It's the HOA on this property that would kill the deal for me.