SFR Possible deal?

[Michael S.]

Would the BP community think this would be a good first time home investment?

- SFR 63900.00 price
- 3 bedroom 1000sf 1970
- 825 monthly rent ( section 8 )
- good tenants in the home already
- OK neighborhood not the best
- no renovations need to be done

[Annette Hibbler]

Hi Mike,
For that price you could easily purchase two single family homes (3BD/1BA) in good desirable neighborhoods within Detroit, Michigan giving you:
$9000 gross yearly income each = $18000.
Rent rates are $700 - $750 monthly
Property taxes: $100 month
Management fee: $100 month
Total Operating Costs: $270 monthly or $3,240/yr x 2 = $6,480
Net Monthly Income approximately: $550 x 2 = $1100 monthly net return.

Option 2: Seller Finance three SF homes at $32K
$20K Down for each
Total Gross Rent: $700 x 12 = $8,400/yr x 3 SF = $25,200
Costs Include:
Finance payment $250 month over 4 year term (paid directly out of rent) no additional out of pocket for you. $250/mo x $12 = $3,000/yr x 3 SF = $9000/yr
Operating Expenses include insurance, taxes, 8% management fee = $230/mo x 12 = $2,760 x 3 SF = $8,280/yr
Remaining monthly balance of $230 paid to you monthly

TO SUMMARIZE:
Gross Yearly Rent $25,200/yr
Less Operating Exp: $8,280/yr
Finance Payment: $9,000/yr
Providing you with a NOI of $7,920 during the 4 year finance term.

At the end of the term, your NOI is $16,920/yr

How does that sound?