Hypothetical Situation: Would you buy this Property?

[Dan M]

Here's very simple hypothetical situation. Would you purchase this home if you were investor looking to hold for 10+ years.

Home Price: 230k
Downpayment: 60k
Loan rate: 4.4%
Improvements/Repairs: 10k
Annual Taxes/Insurance: 15k
Closing Costs: 15k

Monthly Payment/Expenses: $1500

Let's assume it's easy to find tenants and it commands a rent of 2500$ per month.

[Nathan Emmert]

Nope. Half your gross rents are going straight to taxes and insurance. Your mortgage payment is another $850 a month so that's 4 more months rent. That leaves 2 months to cover all your other expenses and cash flow, best case scenario you're at $5,000 a year in cash and that's impossible.

To get that 5 grand you're going to invest $85,000. That's about a 6% CoC return in a best case, more likely you're negative.