Asking price $235,000
Purchase price $225,000
Downpayment 18% - $40,500
closing costs - $4500
Total cash investment - $45,000
Mortage amount $184,500
Monthly gross rent $1800
Maintenance (15% of rent) $270
Propert mngmnt $198
Vacancy fund (5%) $90
Total expenses $1083.10
Net monthly rent $716.90
Mortgage (P+I) $557.91
Positive monthly cashflow $158.99
Cash R.O.I. 4.24%
Monthly principle recapture $253.99
TOTAL ROI (with recapture) 11.01%
Above are actual numbers from a property I puchased in April 2008 at the height of the Saskatoon speculation boom and yes I`m one of those clowns who got in at the height just before the worlds economy took all it`s hits. It`s a 2 bedroom bungalow with a legal 1 bedroom basement suite.
Obviously I made this purchase before I was introduced to the REIN cashflow system. I bought this property on speculation.
My property is now worth between $180,000 - $195,000. Considerably lower than the $225,000 I purchased for.
The only reason I`m cashflowing is because my mortgage rate is currently 2% (prime -0.25) with a 40 year ammort.
I stress tested the property and added 3% to my interest rate. So at a 5% interest rate I have a negative monthly cashflow of approx $170 per month.
I don`t know what to do!? I can`t sell right now becuase it`s not worth close to what I paid for it. Should I ride it out for a few years?
What would ya`ll do? UGH! HELP ME PLEASE!!
I own 4 properties in Saskatoon and the situation is the same on all of them.
Thanks for all input guys, however harsh it may be.