All Forum Posts by: Jason Switherspoon

@Bill S. Thank you for the thoughtful response. The 10% is taken from the total cleared profits (rent - mortgage). The $1490 figure includes the HOA, so the total cost each month is $1490, not $1730. The annual income would be $4920 with these numbers.

Your comment about rent and home value staying steady for the next 5 years is a good point. Definitely something I will take into consideration.

@Bill S. Here are my calculations:

$250,000 mortgage

$50,000 down

Interest rate of 4.875% (I have a credit score of 750,  but didn't want to estimate too low here)

Est. mortgage payment of $1490 (this figure includes insurance @ $1000, HOA @ $230, and property tax @ $1470)

Est. rent for $1900-$2000

Est. annual expenses of 5-10% of the profits

Does that all seem like a good way to calculate expected cash on cash?

Hello, 

I am just about to commit to my first rental property. I am in Colorado and I am buying the property through family. It is a townhouse appraised at $275,000 and I am about to commit to buying it for $250,000. The discount is because my cousin wants to give me a good price on it as I step into the real estate business.

I have run the numbers with a focus on cash on cash returns which looks to yield between 5% and 9% depending on what I get for rent and how much annual maintenance I will be doing.

Given the immediate 25k in equity and the cash on cash estimate, I think this is is a good first property for me, but please chime in on this one.

My biggest concern going forward is the tenant discovery process. I have read about using an application service where the potential tenant pays ~$50 and puts in all their information on a site and the site emails me with the credit score and background check. What have you guys used for this service and how did you like it?