Potential Rental Home Deal

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Hi everyone,

I came across a property today and I plan on looking at it on Monday and I just thought I would throw it out there to see what other people think.

Here are the numbers:

$16,000 purchase price. It's a 2 bed 1 bath home that is fully updated and about 700 sq ft. It just needs a range, refrigerator, and it has an empty spot where an over the range microwave goes.

It is also a bank owned property.

The neighborhood certainly isn't the most high end but it also isn't the ghetto. It's a typical post WWII blue collar area.

Based off of rentometer.com and zillow.com, average rents in the area are around $650-$700 for a house.

So at $650 per month I get......7,800 gross rental income. 5% vacancy of $390....10% repairs of $780.....Insurance at $500....Taxes of $1,232...Management cost of 7% is $519....and another 5% just for a cushion which is another $390.

This would be a cash purchase so no financing would be involved.

In my calculations I'm looking at cash flow around $3,800-$3,900 per year giving me a cap rate of about 23%.

Am I missing anything here and what do you guys think?

I didn't count utilities because I know the renter typically pays them for a sfr and the 7% management fee is an actual percentage that a local company charges. It wasn't just a number I pulled out of nowhere.

Thanks BP!