Solid investment opportunity in Memphis! This 4 bed / 2 bath, 1,184 sq ft home (built 1972) is priced at $155,000. With projected rent of $1,650/month and minimal taxes, this under-construction property offers strong rental income potential once completed.
π Investment Calculations
Gross Potential Rent (12 Γ $1,650) β $19,800
Less: Vacancy (5%) β β $990
Effective Gross Income (EGI) β $18,810
Operating Expenses:
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Property Management (10%) β $1,980
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Property Taxes β $292.39
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Insurance (est.) β $1,200
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Repairs/Maintenance (post-rehab minimal) β $0
Total Operating Expenses β $3,472.39
Net Operating Income (NOI) β $15,337.61
Financing (assumed standard investor terms):
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Purchase Price β $155,000
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Down Payment (20%) β $31,000
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Loan Amount β $124,000
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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 ~$825.25
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Annual Debt Service β ~$9,903
Cash Flow Before Taxes (CFBT) β $5,434.61
Depreciation (Tax Benefit):
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Depreciable Basis (80% of purchase price = $124,000)
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Depreciation Period = 27.5 years
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Annual Depreciation β ~$4,509
Cash-on-Cash Return:
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Initial Equity (Down Payment) = $31,000
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Year-1 Cash Flow = $5,434.61
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CoC Return = 17.5%