I’m New to This and My Cash flow Estimate Seems to Good.

[Layne R.]

As I’ve said, I’m brand new to actually making a deal, I’ve read some posts, listened to podcasts, and thought I had a good handle on running the numbers. But some of these properties seem to good to be true, and as the saying goes, then it probably is. So I’d just like some verification or criticism on my numbers. I know they might be high, trying to make sure I don’t underestimate, but that’s part of what makes it sound good.

Here’s one:

4plex, all units 1bed, 1bath, kitchen, Small living area.

List Price is 100k, I’d do 20k down, calculating 5% interest rate over 30 years.  Mortgage at $430, Taxes at $80, Insurance at $90. Variable expenses I went with 10% of rent for both maintenance and cap ex each, 8.3% vacancy. Rent could be from $2,000 - $3,000, so total estimated expenses become $1,166 - $1,449. That leaves cash flow at anywhere from $834 - $1,551. Depending on specifics. I’ve read that the market can have high vacancy rates, so I doubled it and still came out with $668 - $1,302 cash flow per month. Is this a good deal? Did I run my numbers correctly? Forgetting something? I appreciate any advice, thoughts, or comments. 

[Zeke Liston]

@Layne R. What area are you in? Does the property need any TLC? I can't see anything wrong from your numbers but some other members may notice something that I didn't. The only thing I would say is I got a 25% down 5.25%, 30-year amortized loan but that, of course, depends on the lender.