Feedback on a property I analyzied

[Julius F.]

Thinking of living in the house first (house hack) with roommates and then fully rent out the 3 bedrooms later.

House: 3 bed/2 bath 

Asking price: $337k

Offer price: $292-310k

ARV: $330k

Rent: $2600 (2 bedrooms: $800 x2; basement: $1000)

Closing cost: 5k

Agent cost: 3%

Downpayment: 3% down

Loan rate: 5%

P&I: $1614/mo

Taxes: $328/mo

PMI: $100/mo

Insurance: $100/mo

Vacancy: 5%

Repairs: 1%

CapEx: 3%

Management: 3%

Cash flow: $146 - 240/mo

Cash on cash: 12.25 - 20.91%

[Brent Coombs]

My guess is: the Seller is not motivated to take less than market value for it.

(Why is that my guess? Because they're already asking more than market value!)

My premise is: Paying (close to) market value does not make for an ideal investment!

Question: Is the basement "legal" square footage accommodation?

I believe your analysis should really be based on what single families usually pay to rent similar-sized homes for, rather than what theoretical price might be attainable by sub-letting!

[Yes, I know, you want it to show cash flow. But please - don't kid yourself!]

And, who's taking on the responsibility of property managing, for just 3% rent?

And will 4% be sufficient to cover both maintenance and cap ex? Just askin'...