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Updated over 6 years ago, 05/25/2018

User Stats

13
Posts
9
Votes
Robert DelVecchio
  • Richmond, VA
9
Votes |
13
Posts

Need some quick guidance on a deal

Robert DelVecchio
  • Richmond, VA
Posted

Good afternoon everyone.  I need a second pair of eyes to take a look at my numbers.  This will be my second property and I want to be sure everything looks good to before moving forward. I am open to any advice or pointers here. Thanks in advance. 

Here is the information 

Home - $150,000

Down Payment - 20% or 30k

P&I + Home owners - $800

HOA - $166

Total Monthly Expenses - $965.00

Expected Rent - $1,350

Monthly Cashflow- $384.45

Cash on Cash ROI - 13.55%

User Stats

6,241
Posts
3,800
Votes
Aaron K.
  • Specialist
  • Riverside, CA
3,800
Votes |
6,241
Posts
Aaron K.
  • Specialist
  • Riverside, CA
Replied

Where have you accounted for property taxes or repairs/ maintenance or property management if you plan to go that route?

User Stats

13
Posts
9
Votes
Robert DelVecchio
  • Richmond, VA
9
Votes |
13
Posts
Robert DelVecchio
  • Richmond, VA
Replied

Thank you for the quick response. Please see updated numbers below in chart that includes insurance. HOA covers all outdoor maintenance (roof, yard, siding, trash) HVAC was replaced in the last 5 years. I didn't solve for any other maintenance costs.

HOA:$166.00P&I:$635.05
Property Taxes:$98.50Insurance:$66.00

Total Monthly Expense - $965.55

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User Stats

13
Posts
9
Votes
Robert DelVecchio
  • Richmond, VA
9
Votes |
13
Posts
Robert DelVecchio
  • Richmond, VA
Replied

I would not be using property management for this property

User Stats

6,241
Posts
3,800
Votes
Aaron K.
  • Specialist
  • Riverside, CA
3,800
Votes |
6,241
Posts
Aaron K.
  • Specialist
  • Riverside, CA
Replied

How did you calculate property taxes? They seem quite low to me.  Also you do need to include something for maintenance and repairs if you want to accurately plan.  Also management?

User Stats

425
Posts
446
Votes
Joseph ODonovan
  • Rental Property Investor
  • Ridley, PA
446
Votes |
425
Posts
Joseph ODonovan
  • Rental Property Investor
  • Ridley, PA
Replied
@Robert DelVecchio I would also account for vacancy and capital expenses. I understand the HOA covers the exterior parts of the property but you are responsible for anything inside your unit such as windows, bath n kitchen plumbing issues, furnace, hot water heater, etc.

User Stats

95
Posts
27
Votes
Shane Odom
  • Investor
  • Saint Peterburg, FL
27
Votes |
95
Posts
Shane Odom
  • Investor
  • Saint Peterburg, FL
Replied

I would always add in PM like they said “just in case” and a vacancy percentage

User Stats

13
Posts
9
Votes
Robert DelVecchio
  • Richmond, VA
9
Votes |
13
Posts
Robert DelVecchio
  • Richmond, VA
Replied

Thank you to everyone who has replied. I appreciate your thoughts here. 

Repairs - Because the house was just remodeled completely I added in 3%

Vacancy - This townhome is in a hot area for rentals, less than 5 minutes from a top hospital and in a nice area overall. I added 3% which is on the low end.

Management - I will be managing this property myself

The property taxes were calculated by taking the (2017 county assessment * .95 tax rate) = 1186.00

Is the below cash-flow and cash on cash ROI good, great, bad or ugly?

After adding in repairs and vacancy here is how things add up.

$1,350.00MONTHLY INCOME

$1,073.48MONTHLY EXPENSES

$276.52MONTHLY CASHFLOW

7.51%PRO FORMA CAP

$11,270.00NOI

$34,000.00TOTAL CASH NEEDED

9.76%CASH ON CASH ROI

7.51%PURCHASE CAP RATE