First Deal Analysis Feedback

[Jorge Quintero]

Hello, all! I just made my first deal analysis on a property and wanted to get feedback and your opinion on the numbers.

The house is a 3-bed, 2-bath, 1559 sq ft single family home in Houston TX. The house is in a B- neighborhood. Most of these numbers are very conservative.

Sale price: $150k

2016 Appraised Value: $102,625

Market value: $123, 872

Offer Price: $92,000

The following are yearly estimates

Annual Potential rental income: $16.8k (1400/month)

10% Vacancy: $1680

Annual Property Insurance: $1200

Annual Accounting & legal: $1000

Annual Advertising: $100

Annual Lawn and Grounds Keeping: $500

Repair and Maintenance (10%): $1680

Annual Misc: $500

Mortgage (30 yr., fixed, 5%): $5928 (494/month)

Initial investment: 0

Cash Flow before depreciation: $3245 /yr.

I wanted to offer about 70% of the market value of the house in case I get a hard money loan/private money and need to refinance. The house doesn't really need any rehab, but I don't have much money that I can invest right now which is why I would need the whole purchase price of the house financed. What do y'all think? I used very conservative numbers for my estimates and most of these numbers I would anticipate to be better (like less vacancy rate, more rent per month, and lower interest on the mortgage because of my credit score).

[Jorge Quintero]

@Brent Coombs I should've mentioned that the final cash flow number provided already takes into account property taxes. So the cash flow is still $3245. I was also considering maybe getting an FHA loan and renting out the other two bedrooms for $750 each. I would have to pay for utilities (~2400/yr), but I would be living for free and making some profit on the side.