Analyzing my first potential property! The numbers!

[Kyle Carpenter]

hello all,

I'm from southeast iowa and I was hoping to run some numbers in front of all the investors on BP!

I'll get right to it. The house I am looking at buying is a 1200 sq ft house with 2 bedrooms, 2 bathrooms, and a 768 sq ft garage all built in 2000. The house is sitting on 0.4 acre lot.

The house is selling for 65000 and I believe rent would be 650 to 700 but I've been running the numbers at 650. The 2% rule shows me that I am only at 1%, but I know that could vary with the area you are in. I'll make a list of expenses I think I will encounter.

Purchase - 65000

Rent- 650

Taxes monthly - 105

Insurance monthly- 62

Vacancy 5% - 32

Capital expenses / repair 5% - 32

Mortgage - 278

All that puts me at 509 expenses versus 650 rent to be at 141 cash flow monthly.

I have calculated the CoCR a couple different ways because I am certain that the house is rent ready now but I also figured it with some rehab expenses just in case I find something.

141x12= 1692

1692/16000(down payment plus closing)= 10.5% CoCR

1692/18000(down payment, closing, and 2k rehab) = 9.4%

Like I said before 650 seems like the safe route for potential rent. A couple other things I haven't mentioned are that the house is assessed at 64610 and the interest rate on the mortgage is 4.5% 30yr.

What do you all think? I'm trying not to confuse myself so much that I go crazy. I honestly want to do this so bad but I always seem to find a reason not to and the reason on this house for me is the lower CoC return. I think I would like to see closer to 15% but what do I know!

Sorry for rambling. Let me know what you think! Thanks!