Accounting and roi question

[jparinel]

So Ive just picked up my first deal. Not too exciting, a SFH I purchased for 78500 with 25% down on a conventional loan at 4.875%. Insurance is 980 and taxes around 1500 which makes my payment 543.24. I can get 1100 per month when the house fixed up and ready to rent.

I have several questions about how some costs figure into my net return on investment.
-My cash down was 19625 but closing costs added another 5k
-In addition to standard fixer upper stuff like painting I am going to tile the entire house for 4k (floors cannot be saved)
- the house will need a roof in the next three years and should cost me a good 10k

So when i calcualte my roi, if i count the closing costs, tile (and other repairs for that matter) and roof when the time comes all as expenses, it looks like Im loosing my shirt. However if i can count these as cash invested then my return is acceptable.

I dont wanna fool myself about this property, how should i track this properly?

[Bluemoon06]

So Ive just picked up my first deal. Not too exciting, a SFH I purchased for 78500 with 25% down on a conventional loan at 4.875%. Insurance is 980 and taxes around 1500 which makes my payment 543.24. I can get 1100 per month when the house fixed up and ready to rent.

I have several questions about how some costs figure into my net return on investment.
-My cash down was 19625 but closing costs added another 5k
-In addition to standard fixer upper stuff like painting I am going to tile the entire house for 4k (floors cannot be saved)
- the house will need a roof in the next three years and should cost me a good 10k

So when i calcualte my roi, if i count the closing costs, tile (and other repairs for that matter) and roof when the time comes all as expenses, it looks like Im loosing my shirt. However if i can count these as cash invested then my return is acceptable.

I dont wanna fool myself about this property, how should i track this properly?

In single family ROI is not as important as cashflow.  The floor and roof are not going to be expenses they are capital and need to be depreciated.

[jparinel]

Wonderful, thank you.

[jfpen]

So Ive just picked up my first deal. Not too exciting, a SFH I purchased for 78500 with 25% down on a conventional loan at 4.875%. Insurance is 980 and taxes around 1500 which makes my payment 543.24. I can get 1100 per month when the house fixed up and ready to rent.

I have several questions about how some costs figure into my net return on investment.
-My cash down was 19625 but closing costs added another 5k
-In addition to standard fixer upper stuff like painting I am going to tile the entire house for 4k (floors cannot be saved)
- the house will need a roof in the next three years and should cost me a good 10k

So when i calcualte my roi, if i count the closing costs, tile (and other repairs for that matter) and roof when the time comes all as expenses, it looks like Im loosing my shirt. However if i can count these as cash invested then my return is acceptable.

I dont wanna fool myself about this property, how should i track this properly?

The roof and flooring are amortized over 27.5 years. BTW- Tile floors need a very solid subfloor in place. If your subfloor isn't solid, you should factor that into the cost.

JP