[Calc Review] Help me analyze this deal

[Paul Gomez]

Can you guys help me analyze this deal? It's a new western acquisition deal in San Antonio. Basically, the hard money loan fees (8.9% for first two months, 2.5 pts, ~$1k in fees) plus the 20% down payment puts me in the hole in the first year. It's two properties in one, brining in $1580 from a 2/1 and a 3/1 on the same lot with tenant leases until Nov 2021. The cash flow is great from day 1 but I won't make any money until year 3. This won't really appreciate as much as in a lower cap rate area. It's not in the nicest part of town, but the two properties in 1 makes it appealing. Do people usually have to get into a negative return in order to secure great cash flow for years to come?

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