Please help me analyze my potential first deal?

[Wyatt Postal]

Hey guys I’m 20 years old and I’m currently working on getting my first deal! In my area in the North bay real estate is very expensive and I am looking into a condo for my first rehab/rental. I will lay out the info and I would love some input from you guys because I’m really wondering if this deal I found is worth it.

2 bed/2.5 bath 2 story 1100 sq. Ft condo with 1 car garage in a C neighborhood

Cost 315,000 and exact same floor plan next door sold in May for 345,000 with a basic low budget renovation (still a bit outdated) and my rehab costs would be about 15,000

Condo last rented in horrible cosmetic condition for 2,200 per month. Remodeled comps in the area rent for 2400-2500

Mortgage payment (7% down, 3.75%, PMI, and HOA) would be 2100 per month

My plan would be to remodel in one month upfront then live there for about a year or so then rent it out when I find my next deal. By then I hope to build enough value to apply to remove the PMI and increase my cash flow.

I know it’s not the best deal in the world, but what do you guys think? Thank you guys so much and sorry if I left out any important info

[Adam Lang]

@Wyatt Postal This does not sound like a very good deal to me as an investment. Even if the unit rented for 2500 you are not accounting for vacancy, repairs, property taxes and homeowners insurance in your cost. If you rented this out you would have a negative cash flow. 

At a minimum you should try and find deals with a minimum rent of 1% of the purchase price. Some investors even like to say 2% to make sure its a really good deal. For this to be a good deal the rent each month should be well over 3000. 

Try using the bigger pockets calculators if you haven't used them yet. They are great for analyzing deals.