Hi, I'm new to real estate investing. I ran the numbers on a property in western Michigan on the MLS, and they look good to me. Could someone verify that the numbers are about right? Am I leaving something out?
Units - 2, both 2-br/1-ba
Asking price - $114,000
Repairs - $11,000 (Property is old but one unit has been remodeled and the other is in decent shape. I know there's at least $2,000 in work I'd like to do to update the second unit. I just guessed 10% to get $11K)
Closing costs - $3,990 (guessed at 3.5% of the asking price)
Mortgage - 10% downpayment ($11,400), 30-yr fixed-rate at 4% (rates seem to be 3.6-4.2%)
Rents - Unit 1=$850 (this was the remodeled unit and was owner-occupied, I'm guessing from median rate for 2-br in the area), Unit 2=$650 (currently leased and don't know when it ends, this is below market rate)
Property taxes - $1,760
Insurance - $480 (guessed)
Property management - 8% ($1,325 annual) although I would be self-managing
Maintenance/repairs - 15% (assumed for older property - $2,700)
Utilities - owner pays sewer and water ($1,716 annual based on county monthly record)
$16,560 - gross income (assumed 8% vacancy)
$-7,981 - expenses
$8,579 - NOI
$-5,878 - mortgage
$2,701 - cash flow ($225 monthly)
Cash ROI = 10.2%
Thank you
