@Ciro LoCascio
Since it seems like no one else wants to answer this, I'll take a crack at it. Let's start at the beginning; Most investors use the 50% rule for figuring cash flow. That is that 50% of rent goes to the costs of doing business (maintenance, vacancies, etc.) and 50% goes to costs of ownership (loan servicing, taxes, insurance, etc). Your cashflow is what's left from the cost of ownership. Also, if the owner pays water, this changes to a 60/40 rule.
Granted, this is a quick rule of thumb for figuring cashflow, and it may be different on different properties, but your numbers still seem pretty low for maintenance. 10% may cover the cost of turning over a unit, but what about when it's time to replace a roof, water heater, or HVAC. What about keeping up the external portions of the properties?
Using the 50% rule the numbers look like this:
43,200 (rent) * .5 = 21,600
21,600 - 10,620 (20 yr loan) = 10,980
10,980 - 2800 (taxes) - 8,180
8,180 - 8,304 (HOA, which is a cost of ownership, since it needs to be paid regardless of the place being a rental or a residence) = -$124
As you can see, you end up with negative cash flow. I also notice that you didn't even mention insurance in your figure, which would make that deficit even more.
All of that being said, I'm new to REI and own 0 rental properties. I'm only sharing what I know from extensive reading and listening. Someone with more experience may jump in and correct me (and I certainly welcome it), but personally, I wouldn't do this deal.
-Adam
