re: Information for my fellow Real Estate Investors

So I'm looking at a potential first deal on a SFR buy and hold and these are the numbers:

It's a 3/2 in a well-rented area listed for $109,900, which is about $67.40/sqft. I ran some comps this morning and the most favorable comps around run at about $61/sqft, which would put me at $99,430. I'd probably offer like $97,000 and hope for $100k.

With $5000 down (including like 2% for closing costs), I'd be sitting at $94,430 loan balance at hypothetically 4.75% in a residential loan. So:

Monthly payments (P $ I): $492.59

Insurance: ~$180.00
PMI: ~$56
Monthly maintenance + Vacancy fund: $100.00
Taxes: $115
Property Manager: $120.00 (10%)

Total Expenses: $1080.59

It rented last in 2015 for $1350.00, and the lease comps support this. So assuming I could rent for $1350, it would cash flow at about $270/mo, giving me a 65% ROI.

What do you guys think? It seems like it would be a good deal if I could get it. Two things, though. It needs a fridge, and updated stainless appliances would help. I could do that for less than $2000, and may could use that for leverage for a lower selling price.

Secondly, I'm green on financing. Could someone explain to me whether/why I'd be better off doing a conventional mortgage like above, or a line of credit? I'd like to avoid PMI if at all possible. I'm just ignorant on the various ways to finance.

Thanks.


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