How to run the numbers on a low rental rate property?

[Martin W.]

Hi all,

I'm practicing by running numbers on a diversity of potential properties. When I run my numbers on SFHs with rents >= $900/month my cashflow ends up >$100/month, but when I go down to around $700/month the numbers don't work anymore. I'm trying to get at least $100/month cashflow after expenses.

Here is an example of a property, with my numbers:
Purchase price: $70,000
Rehab: no (turnkey)
Down payment: 20% ($14,000)
Closing costs: $3,500
Mortgage interest rate 5%; loan term 30 years amortizing; monthly payment: $304

Rental income: $700/month (in line with 1% rule)
Property taxes: $96/month (1.65%)
Homeowner's insurance: $50/month
HOA: no
PM: $70/month (10%)
Maintenance: $35/month (5%)
CapEx: $35/month (5%)
Vacancy rate: $56/month (8%)
PM vacancy renewal: $29/month (50% of one month rent)

Total cashflow: $25/month

What am I doing wrong? Or is the 2% really needed for properties of $70k and lower to make it work?

Thank you,
Martin