[Calc Review] Help me analyze this deal - If Self-Managing

[Rahul Sunkavalli]

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

[Alexander Wardell]

@Rahul Sunkavalli I will start off by saying at this price it would be a no for me. That does not mean it will never be a deal for the right price. 

First are you basing the ARV off accurate comps? You had mentioned something about self managing the property which would add $300 to your cash flow but you will also be more involved (job) and you might hate the idea of it after a month. Then you are left with very little cash flow because you need to hire a management company. Without management in place I would not consider $830 cash flow a month a good deal.

5k in repairs would suggest this property needs very little work. Is that accurate? Around $1,600 a unit will not go far so unless this is recently renovated property or has been VERY well taken care of I would reevaluate that repair cost. Since you are putting aside almost $650 a month for repairs and CapEx, I would think you are anticipating some work in the near future or the property is older.

There are so many what ifs and other factors that go into each property. The rental income seems a little off to me also. $3,800 a month would suggest you are anticipating each unit to rent for $1,266 a month. Or is there other forms of income involved with that number? Storage, Garage, laundry?  

At the current price and low repairs, you will be into the property for 82k. I am not sure if you have put an offer in on this property or you are just getting a feel for the market, but I would consider lowering the price to a number that would put a little more wiggle room. If the comps are accurate and it really only needs 5k in repairs I would lower the offer amount considerably. Maybe 330k? Some people will entertain the idea of getting 80% of their asking price so do not assume the worst.

Good luck!