Updated about 9 years ago on . Most recent reply
Is this a good deal for Norcross
Norcross, Georgia that is...
This would be my first deal, so I'd love to get your input on this.
I have a friend who rents a town home in Norcross who has a TERRIBLE land lord. I know that she is willing to sell the place because she has offered to sell it to the tenant several times for 65K. I don't think it's worth that much, but I ran the numbers and even at that price, it seems (to me at least) to make sense. I will not purchase it at that price - I'll try to talk her down to something reasonable - but tell me what you think of the numbers. The "Bottom Line" numbers are, fittingly, towards the bottom - Cap rate, cash on cash, etc.
| COST ASSUMPTIONS | |
| Purchase Price | $65,000 |
| Down Payment | $13,000 |
| Improvements | $5,000 |
| Closing Costs | $3,000 |
| Other | |
| Total Costs | $73,000 |
| Cash outlay | $21,000 |
| INCOME ASSUMPTIONS | |
| Total Rent 100% | $770 |
| Other Income | |
| Vacancy Rate | 10% |
| Total Gross monthly | $693 |
| Total Annual Gross | $8,316 |
| TOTAL RETURN | |
| Appreciation | 1.00% |
| Equity | |
| Tax Break/Penalty | |
| Total | $650 |
| FINANCING ASSUMPTIONS | ||
| Down Payment | 20% | |
| Financed Amt | $52,000 | |
| Down AMT | $13,000 | |
| Interest rate | 5% | |
| Mortage years | 30 | |
| Mortage PMT | $254 (includes tax and insurance) | |
| Including tax and ins. | ||
| EXPENSES | Monthly | Annual |
| Property Taxes | x | |
| Insurance | x | |
| Maintanence | 5% | $416 |
| Management | 6% | $499 |
| Advertising | 20 | $240 |
| Cap Ex | $100 | $1,200 |
| Utilities | $0 | $0 |
| HOA | $20 | $240 |
| Total Expenses | $2,595 |
| NOI | Income - | Expenses |
| $5,721 | $8,316 | $2,595 |
| Cash Flow | NOI - | Debt Service |
| $2,673 | $5,721 | $3,048 |
| Cash on Cash | Cash Flow / | Investment Basis |
| 12.73% | $2,673 | $21,000 |
| Cap Rate | NOI / | Property Price |
| 7.84% | $5,721 | $73,000 |
| Total ROI | Total Return / | Investment Basis |
| 15.82% | $3,323 | $21,000 |