Please Help Analyze - First Potential Property

[Elliot Fuller]

Hello all, looking to take the plunge and pick up our first (intentional) investment property. The logistics of BRRRR are a little too daunting for us right now, having not built a very robust network (particularly in the way of contractors); we've had a hell of a time finding people to work on our own home, much less on a property we are on strict timelines for.

So for now, we are looking predominantly for cash flowing rentals that are mostly turnkey, and we are hoping for, but not relying on long term appreciation/equity as our main focus.

3/2 Townhouse - Zip Code 27834
1496 SqFt

Asking price: $92,000
Comps:  $86,000 - $90,000
Offer: $83,000
Repairs: ~$3,000 - $4,000 -- just needs paint as far as we can tell during our walkthrough

Rent: Currently not rented, but should rent for $900 - $950 based on comps.

P&I: $301
Taxes: $73
Insurance: $32
HOA: $27
Management: 8%
Maint: 5%
CapEx: 8%
Vacancy: 8%
Holding/Repair Time: 1-2 months (approx $600 - $1,200)
Closing Costs: ~ $3,300

Financing:
25% down
30 Year Fixed @ 4.125%

Total Cash in (including repairs): $28,837

Operating Expenses: $407.50
NOI: $542.50
Cash Flow: $240.81

Cash on Cash: 9.8% - 10.02%
Cap Rate: ~7.15%

Notes: The property is a townhouse (1 half of a duplex) in Greenville, NC. Class B/C as best as I can tell with my limited experience. Well kept with new floors and carpets, siding looks good, fixtures in good condition, and no overt signs of major repairs needed. We find some comfort in the townhouse and the HOA in that hopefully it will limit some CapEx over time.

A lot hinges on the $950 rent. $900 drops us to 8.5% CoC, and anything lower would better be put into the stocks as far as I'm concerned, unless maybe I'm missing something? I have a mental block for figures under 10%, but I'm not really clear on what's considered reasonable in this respect... I come from a heavy dividend stock portfolio background

And of course it ALL hinges on getting our offer accepted... Increased purchase price to $86,000 takes us almost below 9%.

Happy to receive input, and thanks for taking the time!

[Richie Thomas]

@Elliot Fuller one last thing I just noticed on Rentometer is that average rents across the board for that zip code are lower today than they were a year ago.  If the lynchpin of your strategy is strong and stable rents, this downward trend on local rents indicates you should proceed with extreme caution: