Dud or Deal #1 (Cost/Profit Analysis)

[Romar Watson]

Deal or Dud?

I've been working on my analyzation skills when it comes to finding deals and seeing if the math makes sense after looking at the numbers for Buy and Hold properties.

I found a property in Petersburg, Va that seems that it could make for a good house hack; The seller is offering a 4 unit (2bd 1br each) Multi-Family for 175k. I wanted to add that it's 7 minutes from a college campus.

http://www.loopnet.com/Listing/20257249/630-634-Ha...

So I crunched the numbers solely based off of the math and the pictures that I observed. so here is the mathematical breakdown that I've come up with: with 5% down fha loan, and the other scenario is with a 30% down payment as a conventional loan (Both accounting for a 10k out of pocket rehab budget).

I received my comp rental value from the average of Trulia and Rentometer. For the Fha loan, I accounted for PMI. For the both loans I set an interest rate of 4.5%.

Pre-Conclusion: Based on the COCROI, it seems like a deal based on both situations. These numbers would give property a 16-17% cap rate and that's including 5% vacancy, 5%CapEx, and 5% for repairs.

what do yall think, Deal or Dud?

[Jason Fike]

I would factor in PM to your numbers. I understand you'll self manage but one day you might want to hire a PM. You might not be able to hire a PM if there's not enough meat on the bone. Just my 2 cents.