Rental Property Analysis - KC Metro

[Tim B.]

Good afternoon! I'm looking at a property here in KC and wanted to run my numbers by some others who have more experience and insight (this is my second analysis). 

I'm looking at a 4 BR, 2 bath SFH. From what I understand, it currently rents for $780/month, but the owner was advised that she should be able to get $850-900/month. Selling price of the home is $90,000 (I'm hoping I can get that number down a little). Owner says that the tenants want to stay until summer of 2018. They are aware that she wants to sell and rent may go up. She advised that current tenants have a good rent history. I have not had a chance to inspect it yet, but she said I could whenever.

Other items of importance, many appliances are about 14 years old.... however, the roof is only 2 years old.

Taxes - $125 ($1500/year)

Insurance - $75 ($900/year)

Vacancy - $45 (5%)

Repairs - $45 (5%)

CapEx - $90 (10%)

PM - $0 (I’ll manage)

Total $380

Mortgage $343 ($72,000 over 30 years at 4%)

Rent = $900/month - $723 = $177 profit after expenses

My investment strategy is to simply purchase 4 or 5 properties and own them free and clear. I hope to buy one at a time and pay them off then move on to minimize my risk and headache. I'm debating on doing a HELOC for the investment to minimize closing fees etc. If you guys have any advice, please feel free.

Thanks!