Part 5/8:
Using his property analysis calculator, Sean inputs relevant data, including assumptions on rent, down payment, renovations, and expected vacancy rates. For the Cincinnati property, Sean determines it does not meet the One Percent Rule, with expected monthly rents of only $1,250, leading to negative cash flow projections.
A Better Example
To illustrate a more promising opportunity, Sean considers a lower-priced property previously sold for $84,000, highlighting how investments in renovations could improve its potential value. After entering figures into the analysis tool, he finds a positive annual cash flow and a cash on cash return of 7.16%, demonstrating the significance of property selection and financial planning.