Author Topic: Need Opinions  (Read 1260 times)

thedayisbrave

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Need Opinions
« on: October 04, 2015, 07:02:02 AM »
Hi everyone.  Found a property that I may pursue.  I have my own sense of the #s but thought it would be fun to hash it out here.  Opinions/thoughts appreciated.

Purchase price: $145k (listed at $150k)

It's an assumable mortgage with ~$132k left on the mortgage.  That leaves $13k as the "down payment" for the equity the seller has. 

Doesn't need much in repairs.  Some siding, new paint, and weatherproofing doors/windows.  Estimating $5k? Plus closing costs of $2k.

All in, will be about $20k.  I'm an agent so I'll get about $3k back as a commission.  So $17k will be in the property.

It's 4 bedrooms, 3 baths.  Rent = $1775 ($21,300 yearly).  I could likely get more by offering it as a shorter term rental.  It is in a student area and I know a lot of international students have trouble finding housing if they're only here for a semester.  It's on the school busline and walking distance to Food Lion, restaurants, Dollar Store, etc. 

Mortgage = ~$9600
Taxes = $1800
Insurance = $900
HOA = $1650
Repairs/Maintenance = $2000
Vacancy = $500 (I own 2 other similar units, almost have to have a waiting list)
Total Expenses (annual) = $16,450

Cash flow = $4,850
Cash on cash = 28%



Another Reader

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Re: Need Opinions
« Reply #1 on: October 04, 2015, 08:58:00 AM »
You are an agent, so I assume you are knowledgeable about mortgages.  Most mortgages are not assumable.  Why is this one assumable?

Have you ever owned a rental in an HOA?  They can be very hard on tenants.

I would increase your vacancy and collection loss.  One bad tenant will wipe out your profit for the year.

Other than that, the numbers look OK, assuming this property is not in the 'hood.

thedayisbrave

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Re: Need Opinions
« Reply #2 on: October 04, 2015, 09:54:37 AM »
You are an agent, so I assume you are knowledgeable about mortgages.  Most mortgages are not assumable.  Why is this one assumable?

FHA mortgages are, and that is what this one is.

Have you ever owned a rental in an HOA?  They can be very hard on tenants.

Yes, my other rentals are in HOA communities.  The bylaws allow leasing.  A lot of communities around here aren't that strict on leasing, because most of them are owned by investors.  It varies with the area, as when I lived in Charlotte the HOAs were a lot stricter... but I was also looking in more urban areas, not in student housing.


I would increase your vacancy and collection loss.  One bad tenant will wipe out your profit for the year.

Thanks!