Hi Forum!
I am a new investor who has read as many books as I think I practically can and have gotten as much knowledge as I can get from them without getting into the game. Now, I know there is always more I can learn, but getting started is the best way to get going.
I am looking to find myself a place to live. I am not thinking of anything really long term for myself (5+ years), but rather a place I can rent from myself and model it as an investment property.
My plan is to find a house that needs some rehab to get up to prevailing neighborhood value and then rent the bedrooms (with myself as one of the renters).
I have gone and looked at only a handful of properties so far and have not gotten too deep into the analysis yet, however I would like input to see if I am taking the right things into consideration when evaluating a deal. I have put together a little sheet I plan to use to evaluate properties with.
The income portion is straightforward as I plan to rent by the bedroom and I have used craigslist for similar area room rents.
Do I have most of the expenses accounted for? (the individual utilities are summed up in the Utilities line). The property taxes are input as an annual expense but are incorporated in the total expenses as a monthly cost. Also, I will be the one doing the management, however for future deals I would like to have an idea of what that might cost should I decide to give that a try.
The Debt Service section it is not a strict plan for financing, just a model. Loan 1 is the amount left after the asking price minus the down payment and loan 2 is the amount projected for the rehab budget. These are calculated on another worksheet not shown, just using the excel PMT() function, but for this example the loan 1 principle is $53,900 and $6,000 for rehab.
Property Address 123 Main Street
Asking $ 63,900.00
Down $ 10,000.00
Income
Total Gross Income $ 1,500.00
Rent / Room $ 500.00
Bedrooms 3
Total Income $ 1,500.00
Expenses
Property Taxes (annual) ($1,510.00)
Insurance ($100.00)
Management (5% Gross Rents) ($75.00)
Maintnence ($100.00)
Utilities (paid by owner) ($145.00)
Electricity 50
Water 20
Sewer 15
Gas 50
Garbage 10
Vacancy allowance (8%) ($120.00)
Uncollectable of Credit Losses (8%) ($120.00)
Total Expenses ($785.83)
Debt Service (see Debt Service sheet)
1st Balance ($323.16)
2nd Balance ($35.97)
3rd Balance $0.00
Total Debt Service ($359.13)
Monthly Cash Flow $ 355.04
What do you think? I am mainly interested in your opinion about the completeness of line items rather than the specific numbers as these are mainly just guesses for most of them like utilities and maintenance and rehab budget.