[Calc Review] Help me analyze this rental property deal

[Sherrie Bower]

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Would someone mind taking a quick look at this?  This is our first deal, so would love to have another set of eyes.  This is four condos that have tenants.  I realize Cash on cash is a bit low.  We have been trying to shoot for 7%.  However, we cannot find anything in our area near this. The list price is $320,000- so we aren't sure if we will get this price or not. Also, do we need to have "vacancy" included if it has tenants or should this be there for future issues?  Thoughts?

[Aaron H.]

Closing costs and loan fees seem low, unless you're really paying cash. If you are, I kinda think you can find something better to do with 300K than get 6%.

Yes, you need to account for vacancy - your tenants will leave eventually, and you have to budget for those turnover costs. Your expense projections might be a bit on the low side overall, but obviously it all depends on your area, the property, etc.

6% strikes me as low, but if you're happy with that rate of return and the property is truly turnkey, then buying something is better than buying nothing.