First rental purchase

[William Baptist]

Hey guys. I was checking out this house for a rental and would like another set of eye to look at it. Any advice would be appreciated.  https://www.biggerpockets.com/calculators/shared/1...

[John Leavelle]

Howdy @William Baptist

First, I agree with @Mark OGara your expense amounts are too low going into the initial analysis. CapEx and Maintenance/repairs together should be 15 - 20% (depending on age and condition of the property), Vacancy 10%. You should also cover miscellaneous expenses 5% (Pest control, legal, accounting, marketing, etc...).

Where did you get your $55K ARV from? $5,000 Rehab? $700 Rent rate? Is it currently a rental?

Most 3 Bed Homes are renting $800 - $1000 from what little research I did.

What Rehab are you counting for $5,000?

You might contact an agent to get comps and Market rent rates.  

If you re-work the numbers using our suggestions I'm getting a negative Cash Flow (-$17.47).  

Bottom line:  Stay very conservative when initially analyzing properties for Cash Flow until you can confirm actual income and expense data proving otherwise.

Hope this helps.  :)