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Real Estate Purchase Analysis: Buy And Hold Property #3 – The Tiny Bungalow

3rd-investment-propertyFrom the moment we saw this house, we knew it had to be ours. It is in a very up and coming neighborhood and it has fantastic curb appeal. It is simply a cool little bungalow in great shape.

Real Estate Purchase Analysis

Purchase Date: November, 2013
Type: 882 Square Foot Bungalow
Purchase Price: $41,250
Appraised Value: $41,250
Terms: Traditional 30 year bank financing. 5.75% APR with a 20% down payment.
Out of Pocket Costs: $10,839.61

Income And Cash Flow

Equity At Closing: $8,250
Monthly Rent: $750
Cap Rate: 11%
Estimated Monthly Cash Flow (Using 50% Rule): $182.42
Estimated Cash on Cash Return – Year 1: 19.84%

Expenses

Mortgage: Principal and Interest: $192.58
Property Tax: $35.00
Insurance: $29.93
Utilities: Water/Sewer/Trash: $50.58
Property Management: Free for first 12 months
Expense Fund: Repairs and Vacancies (Using 50% Rule): $259.49
Total Expenses: $567.58

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