Deal analysis on my first offer

[Patrick Thompson]

Price: $127,500, no closing costs

Down payment: $25,500 (20%) at 4.25% for 30 years

Rent: $1200 with Tenant's already in place

Property taxes: $125/mo

Insurance: $100/mo

What other expenses am I missing?  I am running Cap Ex at 5%, and Maintenance at $75/mo

House doesn't need anything major currently, but the plan is to renovate in 2 years, and then Refi.

Thanks!

[Mike Cumbie]

Hi @Patrick Thompson

Someone has to say it so let me be the first one :P

"Renting to friends/family is a rough gig". Someone always feels they are giving more and it hurts the family more than the business (Which is usually a huge hit). I have rented to friends/family/lovers/My Wife's friends/Wife's family/Wife's lovers/our friends/our family/our lovers....... (OK not really... some are true... :) ...)

If your nephew is helping write it down out of respect to you both. X hours a month on call. Z hours a month repairing issues, Q hours a month enhancing the property. Y amount discount on rent. With something you can both agree to, you can also agree later when someone feels slighted. If it's just a "You were helping". It turns into "I waited 4 hours for a plumber for you, missed 2 dates and now you want me to work on the boiler?"

Good luck and happy investing!