All Forum Posts by: Account Closed

Here is my quick analysis from a buy and hold standpoint using conventional financing, strictly looking at cash flow and cash on cash return.  Lets assume you finance this using conventional financing with 20% down, and a 30 yr term.  Your monthly mortgage payment would be approximately $500.

Since we don't know any details about this property aside from potential gross rent and asking price, we will estimate cash flow with the 50% rule.

We will assume the gross monthly rent is $1,150.

$1,150 / 2 = $575 less the $500 (mortgage payment) = $75 a month in cash flow. 

That figure is low for most people and makes for an even worse COC (cash on cash) return. Assuming this property is turnkey and will need no repairs, you will have approximately 30k cash wrapped up in this with a 20% down payment and closing costs.

$75 cash flow a month * 12 months = $900 cash flow a year.

$900 /$30,000 = 3% cash on cash return.

There could be other aspects of this scenario that make it a good deal (i.e. priced significantly below market value), but for the most part it does not seem all that enticing to me, even with seller financing.

Yeah, I agree with the logic on your offer window, obviously getting it at 70% less rehab costs would be ideal.  What does your realtor say about your offer of 130-135k? 

How much do you plan to offer on this property?

I am curious, what does it cost to have that porch repaired?  Keep us posted on the rest of the progress, I am sure it will come out nice.  

You can actually see the house now!  Nice work.

What are your plans for the landscape?  Just keeping it simple?  How extensive will that porch repair be? 

Oh yeah I think I did.  Looks like a good one.  Is this in west Garden City? 

Nice progress, good call opening up that wall, definitely looks better!

Thanks @Matt Holmer  

The kitchen, living room, and one of the bed rooms (not pictured) had original hardwood.  We cleaned them up with water and vinegar.  As for the other bedroom, bath, and hallway we installed vinyl plank flooring.  It holds up well and isn't too expensive.  

Just an update.  The rehab on this property was completed and listed for rent a couple days ago.  We estimated 5k in repairs and ended up spending $5,050. 

Here are a few pics of the inside.

Thanks everyone.

@Marcell Z. This property was actually listed on the MLS and had been on and off the market for several months. It was originally listed for 45k a year ago, once the price got down to 34k it got our attention.