Scenario 1 – Cash
Cash Flow Analysis
Propert type: Single Family Residence
Purchase Price: $145,000 (may vary)
Taxes: $126/mo
Insurance: $35/mo (estimate, rate may vary)
HOA fee: $41/mo (estimate, rate may vary)
Property Management: $112/mo $(assuming an 8% fee)
Total Monthly Expense: $314/mo
Propert type: Single Family Residence
Purchase Price: $145,000 (may vary)
Taxes: $126/mo
Insurance: $35/mo (estimate, rate may vary)
HOA fee: $41/mo (estimate, rate may vary)
Property Management: $112/mo $(assuming an 8% fee)
Total Monthly Expense: $314/mo
Rental Comps: $1395/month (estimate, rate may vary)
Monthly cash flow: $1,395-$314=$1,081
Yearly cash flow: $12,972
ROI = cash flow/purchase price $12,972/$145,000=9%
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If you are considering paying cash and have the ability to finance you will definitely want to consider leveraging your investment. For example, instead of paying cash for an $80,000 condo you could leverage your money and put $40,000 down on 2 properties…giving you twice the income. Where else could you invest 40K and get more than 10k a year in free cash flow? Get your investment back in 4yrs all while your tenant pays down your mortgage.
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