Red-CedarThis supplier is amazing. They are very much a mom-n-pop style shop and with a great reputation. They even offer a 12-month rental guarantee on your property when you purchase!

Location: Baytown (Houston), TX. Built In: 2003

Purchase price: $103,000 (not a foreclosure, normal sale)

Property info: 3 bedroom, 2 bathroom, 1584 square feet

Income

Monthly rent collected: $1,250

Expenses

Monthly expenses

Property taxes: $236

Insurance: $117

Property management fees: $113

HOA: $13

Monthly expenses (conservatively estimated)

Vacancy (7%): $88

Repairs (5%): $63

Total Monthly Expenses- $629

Net Income = Income – Expenses =  $622

Advanced Numbers

Cap Rate =

annual net income (non-inclusive of mortgage payment) / purchase price = 7.24%

Cash-on-cash return =

Depends on your leveraging.

 

Are you thinking the cap rate is lower than what you are interested in? Check out one of Ali’s articles from BiggerPockets that hits this exact topic!

The 2% Rule: Fact, Fiction, or Feasible?

Comments
  • Matt
    Reply

    Hey Ali, can you email me more information on this property? Thanks

    • Ali
      Reply

      You bet! Emailing now…

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