Hey guys, I’ve been using this cool investor app to keep track of my expenses, and I thought I’d give you a rundown of my latest investment. Brace yourselves for some harsh criticism from the fancy folks, but I reckon this breakdown might be useful for the newbies out there.
So, I dived into this deal with a 5% interest HELOC loan and put in a total of 22k for a property valued at 215k, pulling in a sweet 2k a month from rent. Here’s the nitty-gritty on how it all went down:
The property is a single-family home in Indiana, built in 1915, boasting 4 bedrooms and 2 baths sprawled across 1,812 sq.ft., sitting on a 2,483 sq.ft. lot.
When it comes to the purchase and rehab, I snagged the place for 70k, with a rehab cost of 105k. After fixing it up, the value shot up to 215k, making it a pretty good deal, if I do say so myself.
In terms of financing for the purchase, I went for an interest-only loan with a 5% rate, covering the purchase and rehab costs, totaling 176,750 bucks. The monthly payment on this bad boy came to 736 bucks.
For the 3 months I held the property, my holding costs hit 4,009 bucks, with loan payments of 2,209 and other recurring expenses at 1,800.
After a bit of time, I decided to refinance, landing a loan amount of 161,250, with refinance costs eating up 2,960 bucks. This, in turn, gave me a cash-out of 22,469, bringing my total cash invested to zero.
With the refinance, I opted for a 30-year amortizing loan at a 7.625% rate, totaling 162,863 bucks. The monthly payment on this baby sat at 1,153 bucks, or 13,833 a year.
In terms of cash flow in the first year, I raked in 2k from rent, with 100 bucks set aside for vacancy and 600 for expenses, leaving me with a sweet cash flow of 147 bucks.
When it comes to returns and ratios in that first year, the numbers looked pretty good: 22.3% cap rate based on purchase price, 7.3%