First Buy and Hold Deal Analysis

[Jon B.]

Hi BP - I've been searching for my first rental property.  I'm starting with single families for my first deal, with the intent to graduate to multi-families at some point.  I've come across a property that I think makes sense on paper, and I'm interested to hear what you think.  (I'll be walking through it early this week and will learn about the state of the roof and any updates to mechanicals.)

The property is a 2-story, 3 bed/2 bath, 1650 sq ft SFR built in 1899 in an area dubbed the "Historic West-Side" of my hometown. It is mostly rent-ready (will paint a couple of rooms), and I will hire out the property management.

Here are the details:

• Anticipated Purchase Price: $64,000
• Market Rate of Comps: $85,000
• Anticipated Monthly Rent: $950 ($11,400 annually)
• Total Annual Expenses: $9070
  • P&I: $3177
  • Insurance: $300
  • Repairs: $1000
  • Taxes: $1769
  • Property Management: $1140
  • CapEx: $1000
  • Vacancy (6%):  $684
• Net Annual Cashflow: $2330 ($194/mo)

I see this as a nice balance b/t cash flow and potential appreciation.  So what do you think - deal or no deal?  Thanks in advance!