Help a newbie analyze a potential property?

[Mandy Ellett]

Hello to all out there in the BP community! I'm a very new investor and am wondering if I could get some help analyzing a potential property - I've been using an excel spreadsheet I found here on BP, but being new, I'm certain I'm missing something.

The property is a 2nd floor 3/1 condo, ~1200 sq ft.

Asking price $165,000

Assuming a 30yr loan at 5%, with a $45,000 down payment - total mortgaged amount $120,000

Assumed monthly mortgage payment: $591

Assessed monthly rent: $1450 (based on Craigslist comps, pad mapper, and HUD fair rental value sites)

Essentially turn-key, no immediate rehab necessary.

Annual rent: $17,400

Vacancy (5%): -$870

Taxes: $1200

Insurance: $500

Prop Mgmt: $1800

Maint: $1000

Utilities: $2400

Advertising: $500

Misc: $500

I get a total operating expenses of: $9100

NOI: $7430

Annual mortgage payments: $7086

Annual cash flow: $344

CAP: 5%

Looks like I'm not getting to the 1% rule, sitting at about .87% with the rent.

Monthly, with rent of $1450, minus mortgage, HOA, utilities, prop mgmt, etc, I seem to be coming up with monthly cash flow of $200, but the other annual costs are what's bringing the annual cash flow down.

Based on the monthly analysis, it's not great, but not horrible, but based on the annual numbers it doesn't really seem worth it.

What am I missing?

Thanks in advance!