Fort Worth, TX Deal Analysis - Newbie

[Taylor Robinson]

Hi All!

As the title indicates, I am a newbie, so keep this in mind as you read my post.

I am analyzing a property for a potential buy and hold strategy in Fort Worth, TX. I have never purchased a property before so I would like some feedback on my analysis and if there is anything I should be wary of. The details are as follows:

• Property Address: 11412 White Leaf Court E, Fort Worth, TX 76135
• Property Type: Residential, Single Family
• Style: Single-Wide Mobile With Land

• List Price: $69,900
• Analyzed Purchase Price: $60,000 
• Estimated Closing Costs: $2,400
• Estimated Rehab: $5,000 (replace flooring with heavy wood-looking linoleum, also get fridge/stove and tidy up the place)
• Down Payment: $12,000 (20% of $60,000)
• Total Initial Investment: $19,4000
• Expected Rent before Vacancy: $1000/month (my PM estimated $1,000-$1,200, but I'm using $1,000 to be conservative)
• Vacancy: 5%
• Principal + Interest: $261.35/month (assuming 20% down, 5.125% interest rate. Given that it's a manufactured home I'm not 100% certain this financing is available like it would be for a stick-built home)
• Taxes: $100/month (assuming 2% of $60k purchase price - this may be a bit low...any recommendations for how I can easily verify? I get a little lost using the Tax-Assessor website for Tarrant county and don't know where I can find the info for all of the districts necessary to compute tax rates)
• Insurance: $55/month
• Maintenance: $69/month
• Property Management: $116/month (11.6% of rent before vacancy - this includes leasing fees)
• CapEx: $183/month
• Estimated Net Cash Flow: $166/month
• Cash on Cash Return: 10.3%
• Cap Rate: 12.2%
• 1% Rule: 1.67%
• 5 Year IRR: 10.3%
  10 Year IRR: 15.9%
• 20 Year IRR: 17.2%
• (IRR calculations assume 3% rent growth, 2% appreciation, 2% inflation, 8% selling costs). All of my analysis is performed in a pricing tool I built in Excel which I'm happy to share if anyone would like to use/review!

Some of my main concerns about this are the following:

• What are the downsides of purchasing a manufactured home? It is on its own land and not within a park which is good, but are there other issues I should be concerned with? It has been on the market for 135 days as of 9/19/2019; should I expect similar difficulty when selling it?

• Is the area good? Another thing to note is that I live in Southern California. This will be an out of state purchase and I will not (and probably will never) view the property personally. I have based most of my deal finding in Forth Worth/Arlington/Dallas areas on assigned schools. Of all the properties around the $100k price range or less, this has the best schools that I found, feeding into Azle. Is it smart for me to base so much of my deal finding on school ratings? As of now, I won't even really analyze most properties in poor school areas (1-4 school ratings), even if it looks profitable on paper. 

• Blanket question...what am I missing? To me it looks like a good deal but I am hesitant and assume that I am leaving out some crucial part of the analysis. If it were actually a good deal, wouldn't it have sold a long time ago?

Thank you all for taking the time to read. I'm excited to begin investing but need to get some other eyes on my work and thought processes to make sure I'm not crazy. Please let me know if I can provide additional detail!

Taylor Robinson