Rental Purchase
I have several investors that have purchased foreclosures to use as rental properties this year. Below is an example, we completed 14 of these in 2008 and 2009 and this is a very typical scenario.
Purchase Price: 93,000 20% down 18,600
Fixup 7,000 7,000
Total Cost 100,000 25,600
Rental 1,000/mo.
Mortgage 74K -660/mo. 6% interest+taxes+ins.
Monthly Cash Flow 340/mo. 4080/yr.
Cash on Cash Return % 16%/yr.
Depreciation 2900/yr 900/yr in tax savings
In 3 years: Property value should be back to 160-180,000
Conservatively, 3 years value at 150,000
Appreciation 50,000
Net Rent 12,000
Tax Savings 3,000
Total Return on 26K 65,000
Average per year return: 84% return on investment!!
*Returns may vary, but this is typical of the 14 properties we closed and rented. I have 2 myself and will be buying 2 more next year. Call me to get involved with this exciting investment strategy!
