I am thinking to make an offer on my first potential investment property, tell me what you think!
Property: 3Bed/1Bath SFH
The house has been renovated with laminate floors in the whole house, new windows, new dishwasher, freshly painted, granite countertops and new light fixtures. The house is pretty cute, has a nice yard and only a few minutes from a large hospital.
The seller is offering closing cost assistance to buyers that I will also hopefully be able to take advantage of.
List Price: 111,000
Max price: 100,000 (MAX I will pay, I will start lower, as it has been on the market 4 months already)
Target Rent: 1200/mo (I have looked at rentometer, zillow, craigslist. There are apartments nearby for 1375/mo but the house has a yard and in-unit laundry...maybe I can go higher even)
Mortgage:385 (25% down, 75,000 mortgage @4.615 - quoted by my lender)
tax: 153 (1833/year)
insurance: 50 (600/year)
maintenance: 84 (1% of purchase price)
vacancy: 120
management (I will self-manage but you know...): 120
Cash flow: 338/mo (4,056/year) Cash-on-cash return: 16% (slightly lower maybe as I need to buy a w/d pair and might have to pay some closing costs)
This would be the most pessimistic scenario, ideally I will be able to negotiate a lower purchase price, or I will have to move on. Thank you for your feedback!