Need help with this deal

[Kathiuska Ramirez]

Hi guys.... need your expertise on this deal

Seller financing is foreign to me. Property is located in Springfield VA, which is a great location. Close to the the 95 and DC.

Here it are the numbers..

Sale price 375K

7% down

5% interest

30 year loan, but plan on buying in 3 years

20K in rehab needed

Rents for 2200-2500 max .  Is this a good deal? 

HOA - 89.00 a month

[Tim Herman]

@Kathiuska Ramirez to get most rentals to cash flow you need to be near the 1% rule, Monthly rental divided by 1%. In this case $2500/.01=$250000 max purchase price. Certain areas will not cash flow but you have to bank on appreciation. Using another rule of thumb that 50% of gross rents goes to expenses and half goes to profit and mortgage paydown. So $1250 is your profit before paydown. Your mortgage at 5% is $1871 so a net loss of $621 per month.