[Calc Review] Help me analyze this deal

[Geoffrey Tanudjaja]

Hi everyone,

I just upgraded my account to pro status and I would like to learn about real estate investment.

I found this deal in Detroit and would like to ask your opinion about my way of analyzing this deal. 

The purchase price itself is $75,000 (it is currently being remodeled, so, I don't know what is the condition inside. Planning to schedule for a tour in the next couple of weeks).

I'm a newbie in this thing and I'm pretty sure I miss a couple of expenses that I should include in this analysis.

All the help will be much appreciated!

Thank you in advance, everyone!

Cheers,

Geoffrey 

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[John Leavelle]

Howdy @Geoffrey Tanudjaja

What is your planned use for the property? It's a Single Family Residence (SFR), but, you are showing rent by room. Are you looking at renting to students?

You need to include Closing costs which are 2% - 5% of Purchase price.

You say the purchase price is $75,000. Yet you show $60,000 in your report. Which is it. How did you arrive at $75,000 for the ARV?

Why 15 years for amortization and not 30 years. A longer period will reduce the monthly mortgage payment which in turn increases your Cash Flow. Are you sure you can get 4.2% APR?

Is the property currently rented?  Are you using the current rent rates?  If not, where did you get your numbers?

You are missing a couple of key expenses. You need to include Insurance and CapEx. You can get free quotes for the insurance. The CapEx will probably be somewhere between 5% to 10% of Rental Income. It will depend on the age and current condition of the property. In lieu of the actual numbers you can get a reasonable conservative analysis of potential Cash Flow using the 50% rule ($315 per month). it tells me you may have a good deal. This also depends on the quality of the neighborhood.