All Forum Posts by: Jon K.

@Richie Thomas thanks - makes total sense! Your last comment is part of the reason I plugged $5500 in for repairs even though the property has mostly been updated. I'm still trying to get a sense of what makes a deal "good" but I feel that with my generally safe/conservative estimates, the deal still works well in my noob eyes. Assuming 4% rate on the loan, the property would cash flow about $73 or so less / mo which brings down COC to about 14%.

Hey @Richie Thomas

Thanks for the response.

3% interest rate is a rough estimate of what I'd be able to secure based on nerdwallet's calculator with my credit score and cash for DP. https://www.nerdwallet.com/mor... I have not spoken to a loan officer yet as I'm just practicing the routine of analyzing deals, so I'm not sure if this is very realistic, but rates are very low at the moment. What are your thoughts? - this would be a 100% rental (non-owner-occupied).

$5500 upfront repair cost - property is in good condition and has been mostly renovated inside already, so planning for light / medium-light updates. It could actually need nothing as it's being rented and not flipped but I felt this number was safe for the sake of practice.

$2k in monthly projections - this one might actually be a bit conservative depending on the tenants. It's a college/young professional area and is a 4BR so $500 / BR would be a very safe number based on personal experience with renting in the area.

$180k ARV - this is a complete guess. I also have not spoken with an agent yet so I have not received comps. I'm assuming some minor updates could boost the value slightly. This property was listed for $200k in June but had a buyer fall through and has since dropped to $164,900 due to time on the market.

Down payment would be 20% of the purchase price of $164,900 which works out to $32,980 so there shouldn't be any PMI. Closing and repairs would be paid with cash and not rolled into the loan - not sure if that's generally what folks do?

Thanks for taking a look!

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