Affordable Memphis investment! This 3 bed / 2 bath, 1,165 sq ft property (built 1956) is listed at $67,000. Currently vacant and in need of a full renovation, it offers strong rental potential at $1,300/month once completed, making it a great value-add opportunity.
Β Investment Calculations
Gross Potential Rent (12 Γ $1,300) β $15,600
Less: Vacancy (5%) β β $780
Effective Gross Income (EGI) β $14,820
Operating Expenses:
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Property Management (10%) β $1,560
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Property Taxes β $492.26
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Insurance (est.) β $1,200
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Repairs/Maintenance (post-reno minimal) β $0
Total Operating Expenses β $3,252.26
Net Operating Income (NOI) β $11,567.74
Financing (assumed standard investor terms):
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Purchase Price β $67,000
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Down Payment (20%) β $13,400
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Loan Amount β $53,600
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Interest Rate β 7%
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Term β 30 years
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Monthly Mortgage Payment (P&I) β ~$356.61
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Annual Debt Service β ~$4,279
Cash Flow Before Taxes (CFBT) β $7,288.74
Depreciation (Tax Benefit):
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Depreciable Basis (80% of purchase price = $53,600)
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Depreciation Period = 27.5 years
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Annual Depreciation β ~$1,949
Cash-on-Cash Return:
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Initial Equity (Down Payment) = $13,400
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Year-1 Cash Flow = $7,288.74
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CoC Return = 54%+
