When would this property make sense?

[Matt Rauer]

Hi everyone.  I'm new to deal analysis so I wanted to give this one a try and see if I'm at least in the right ball park for analyzing deals

• Purchase price - $587k
• Yearly gross income - $42,461 (though for current listed rents it would be $60k)
• Yearly Expenses (50% rule) - $21,230 ($30k w/ listed rent rates)
• pro forma expenses - $24,700
  • Insurance - $2,400
  • Taxes - $12,000
  • Maint / CapEx - $6,300 (15% of rent)
  • Utilities (snow/lawn/water/sewer) - $4,000
• NOI (50% rule) - $21,230
• NOI (pro forma) - $17,761
• P&I w/ 10%down - $30,000 ($2,500/month)

Obviously this is a negative cash flow w/ a low DP mortgage, so this house isn't worth it to me.  But would it be worth it if I got it for $100k less and the rents were at the $60k/year?

Then its $30k NOI w/ $24k in P&I payments = $6k cash flow/year ($125/unit/month).

Am I missing anything else?