Hypothetical Costs & Projection on 3-4 Bedroom* Rental Property
Purchase Price  $  55,500.00
Title Insurance  $      550.00
Property Insurance ($1.00 for every $100.00 Mortgaged)  $      565.00
Recording & Notary  $      150.00
Reserve for Lead Paint  $    1,500.00
Transfer Tax  $    1,110.00
Photstat, Faxes, Etc.  $        35.00
Total Acquisition Costs  $  59,410.00
Mortgage, Legal & Financing
Appraisal Fee  $      350.00
Review of Specifications, Building Estimates & Payment Schedule  $      175.00
Application Fee  $      150.00
Draw Inspections (2 at $150 each)  $      300.00
Loan and Partnership Agreement  $      375.00
Note  $      175.00
Mortgage  $      175.00
Placement Fee (1-3%)  $      675.00
Review Title Report, Binder & Final Policy  $      100.00
Review Fire, Liability, or Builders Risk Policy  $        75.00
Review or Prepare Buyers Agreement of Sale & Addenda  $      150.00
Prepare for & Attend Settlement, Review Distr. Sheet, Escrows, & Title Questions, Etc.  $      200.00
Total Mortgage, Legal & Financing  Costs  $    2,900.00
Total Acquisition, Legal & Financing Costs  $  62,310.00
Construction Costs  $    7,500.00
Total Purchase, Settlement & Construction  $  69,810.00
Carrying Costs 6 Mos. Taxes (R.E.)  $      600.00
Interest 3 Mos. At 1 1/4% a month  $    2,400.00
Electric, Water, & Sewer 6 Mos.  $      300.00
Cost of Signs & Advertising  $      180.00
Total Carrying Costs  $    3,480.00
Total Job Cost & Loan  $  73,290.00
* Can be 3 bedrooms converted to 4
Carried  $  73,290.00
Refinance Costs
Application (Appraisal & Credit)  $      335.00
Points 2% of 70,000 Mortgage  $    1,400.00
Title Insurance  $      500.00
Recording, Notary Fees, & Misc  $      200.00
Total Refinance Costs  $    2,435.00
Total Cash Expended  $  75,725.00
Appraisal Value of Property  $  90,000.00
1st Mortgage  $ (70,000.00)
Owners Equity  $  20,000.00
Cash Flow Picture
Rent received (Monthly)  $    1,150.00
R.E. Taxes  $      100.00
Insurance  $        50.00
Repairs  $        60.00
Vacancy & Reserves  $        70.00
Total Expenses  $      280.00
Net Profit  $      870.00
1st Mortgage (Principle & Interest)
8% - 30 Years  $      536.00
Net Cash Flow Partners/Month  $      334.00
Additional Benefits:
Average monthly payoff principal on a 360 month mortgage of 70,000  $      195.00
Average monthly market value increase at 3% per year ($2,700)  $      225.00
Total monthly buildup of equity (tax deferred)  $      420.00