Opinion on this apartment deal for rental?

[john3232]

Originally Posted by qhoc

I read the past inspection reports. So $40-50K is very accurate. I have done construction work before and have business account. That part I am less concerning but more on the macro economic factors and "opportunity cost"

That's a big advantage.

[AccidentalRental]

What will your cashflow be after the refi? Is the mortgage included in your monthly expense estimate or is that before the refi? If not, then I think it's cutting it too close after the refi. I'd be concerned about the margin left after the refi given the condition of the property you described.

You clearly have the cash on hand now but if you use the refi to buy another investment then you might not have enough reserves when something big does go wrong on this property.

[qhoc]

Originally Posted by AccidentalRental

What will your cashflow be after the refi? Is the mortgage included in your monthly expense estimate or is that before the refi? If not, then I think it's cutting it too close after the refi. I'd be concerned about the margin left after the refi given the condition of the property you described.

You clearly have the cash on hand now but if you use the refi to buy another investment then you might not have enough reserves when something big does go wrong on this property.

It is just few hundreds dollars positive cash flow monthly. That is taken into account of including mortgage payment, management fees, vacancy rate... I have to leave ~$75K in the deal and double that only when I exit the deal in 3 years.

Base on the math, it's not too terrible. But assumptions of appreciation rate of 5% and large amount of cash getting locked in the deal for years, that causes some questions.