All Forum Posts by: Kwame Darko

I just re-ran the numbers as @Thomas S. did and it comes out to 323.89 cash flow per month. I agree with the flip aspect but is that not what we would want to see per door in order to continue with the investment?

@Tchaka Owen Definitely! Thanks for the advice. I'm actually just starting out so Ill re-analyze a couple deals I have seemed to now realize I over estimated. 

@Tchaka Owen what about cap ex and repairs? Do those apply to? Also what would you consider a good cash flow to consider keeping the condo? 

@Paul S. I believe the total expenses includes homeowners insurance at $75 a month. I may have forgot that so Ill have to rerun the numbers. I would be managing the property myself since this would be my first so I will forfeit the property management aspect and that will bring my cash flow to somewhere in the range of $145. As for estimated repairs, that was just a rough estimate I came up with based on the pictures. I will be going to actually look at the unit this weekend but I honestly dont think it needs that much money in work. What is the typical cash flow number one should look for? 

Hello BP,

I need help analyzing this deal. This is a foreclosed condo.

2 bedroom, 1 bath 924 sq ft condo

Purchase price: $65,000

Estimated repairs: $14580 ($15 sq ft estimate) for carpet, paint, kitchen, light fixtures.

ARV = ~$100000 - 110000 (Based on what the same condos sold for recently)

20% down payment at 4.5% over 30 years.

Property taxes ~$2700 per year

HOA = $161 per month

Rent = $1200

Expenses = 7% vacancy, 8% cap ex, 8% repairs, 10% property management, ~ $70 for water and sewer and I assumed the HOA pays for garbage. I would have the tenant pay for electricity, heat and gas.

Monthly expenses are calculated at $1,174.01 leaving me with $25.99 in cash flow, 3.28% pro forma cap, 0.92% COCROI and 5.04%. 50% and 2% rule says this is a good. Also, the gain in equity says this is a good deal but based on the return it isn’t. Is there another way to look at this and am I over estimating my expenses. I will be managing the property myself but I like to look at everything as if I weren’t. Any other feedback would be nice!

Thanks,

Kwame

I would also like add that the HOA is $161 a month and this is a 2 bedroom and 1 bath 924 sq ft condo.

Hello BP,

I need help analyzing this deal. This is a foreclosed condo.

Purchase price: 65,000 

Estimated repairs: 14580 ($15 sq ft estimate) for carpet, paint, kitchen, light fixtures.

ARV = ~100,000 (Based on what the same condos sold for recently)

20% down payment at 4.5% over 30 years. 

Property taxes ~2700 per year

Rent = 1200 

Expenses = 7% vacancy, 8% cap ex, 8% repairs, 10% property management, ~ $70 for water and sewer and I assumed the HOA pays for garbage.

Monthly expenses are calculated at 1,174.01 leaving me with 25.99 in cashflow, 3.28% pro forma cap, 0.92% COCR and 5.04%. 50% and 2% rule says this is a good deal. Also, the gain in equity says this is a good deal but based on the return it isnt. Is there another way to look at this and am I over estimating my expenses. I will be managing the property myself but I like to look at everything as if I werent. Any other feed back would be nice!

Thanks,

Kwame

One thing I would like to ask is don’t mobile homes actually go down in value over time?

Appreciate the reply!

Hello all!

I am new to real estate and would love to learn more. I have read the bigger pockets book by brandon turner and have done alot of online forum reading mainly reddit. I am currently in the Connecticut market and I would love to know from experienced landlords if getting a town home or condo would be a good initial rental since their relatively cheaper than homes. Looking for some insight!