Help me analyze this deal!

[Nicholas K.]

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So I am thinking about getting into this deal but I have some reservations.  What are your thoughts? 

- ROI is low.

- Cash flow appears decent. 

- This house needs major renovations and that is why I put the renovation cost where it is. 

- It is in a good neighborhood. 

[Michael Garofalo]

If the property truly needs $40,000 worth of work and is an unlivable condition, you aren't going to be able to get a conventional 30-year fixed loan on the 80k acquisition price. You would need to pay cash, perform renovations, then go back to the bank and refinance, which will make your monthly payments go up. Or do something like a 203k loan where you can lump in the cost the renovations. Either way, your mortgage payment is going to be more than $343 per month. Additionally, your expenses seem high and for me, that CAP rate is way too low.

Not trying to be negative but for someone who has been in the game for a few years now, I would not buy at this price if it needed that much work.