Deal Analysis Advice

[Brian Washburn]

I am brand new to Real Estate in the Omaha, NE area, looking to buy my first buy-and-hold in 2018. I hear people say all the time that a good benchmark for these deals should be $200+ cashflow per month. What I am finding, however, is that I am having a really hard time finding any properties that meet that benchmark when using the BP calculator.

EXAMPLE:

-4BR/2BA in great location (near 2 universities and entertainment districts)

-Listed for $85,000

-No major repairs needed

-$1,700 Annual Property Tax

-20% down

-30-year Term

-$90/mo insurance

-$925/mo rent

-10% holdback for vacancy

-7% holdback for CapEx

-7% holdback for Repairs

-5% holdback for Management (though I would manage myself)

Inputting all of these factors I am getting almost no cash flow. To hit $200 cash flow I have to bring my purchase price all the way down to ~$48,000, and the list price is already below a lot of comps.

Can anyone tell me what I am doing wrong in these analyses? I seem to get these type of results for every deal I look at.

[Matt Morgan]

@Brian Washburn, wondering why you think you can only get 925 in rent?  A 4 bed, 2 bath house should be collecting more than that.  I bought a 3,2 on 50th and Leavenworth and projecting to get at least 1200.  I’m sure you analyzed the area for expectations of rent, but I just thought that was low. Also, I feel like the getting above  or around the 1% rule is and ther check you can do to make sure the property is worth pursuing. I say give it a go and good luck.  Oh and attend @Collin Schwartz’s meet up this month too.