Analyzing rental property, am I doing this right?

[Anton Bachuk]

So i've been running a lot of these lately, would like to get proficient at it and was hoping someone would look one over and see if I got this down right.  

I'll include a screen shot of all the number crunching but this is what we are working with. 

Single family home in need of some TLC for sale in western PA for $39,900.

Median house price in the neighborhood $75-80k

Average rent for a similar property in that zip code $850-$900

I would be putting down 20%, 5% interest, 30 years.

Allocating $15k for rehab

Total cash needed $24,177

Rent: $900/mo

Vacancy: 5% ($45)

Taxes: $238/mo

Home Insurance: $38/mo

Maintenance: 8% ($72)

Capital Expenditures: 8% ($72)

Utilities/Landscaping paid by tenant. 

Mortgage: $171/mo

I ended up with $265 in cash flow and 13.1% cash on cash return.

Am I missing anything? 

Really appreciate you taking the time to look this over.

[Adam Scheetz]

@Anton Bachuk at first glance I notice you vacancy is extremely low. Going solely by the look of the house and inferring it's in a class C type neighborhood, 5% vacancy is unrealistic. I'd go 8-10% for the added buffer.

The insurance looks as though it reflects the as-is condition. I get quotes for the As-is, during rehab, and finished rehab conditions. In New Jersey, I start with $100 a month for insurance. As I get multiple quotes, I adjust accordingly.

You mentioned TLC, then say a Rehab of $15k. In my experience, that's a light rehab. As in carpet and paint and maybe some appliances. Make sure you're realistic and plan for additional expenses. In the Jersey areas I look, $60-$80k and occasionally over $100k is not uncommon for a full rehab. Kitchens $15-40k (depending on finishes and size), Bathrooms ($7-10k), floors will vary but are easy to price out. Unless the house is currently livable but just not 'pretty', I'd up those rehab numbers. Remember, don't change or squeeze the numbers to get them where you want, see where they are naturally and then build in margins of comfort to keep you safe.

You might have a good deal here, just be sure to do your due diligence and research for the SOW and area. Feel free to reach out and I'd be happy to share my process of researching and evaluating deals.