Deal Analysis.

[Kurt K.]

Hi everyone. I'm new to BP and new to REI in general. I'm looking to do my first deal and currently have an offer in a 6-unit multi-family house. Seller asking $140k with gross profit of $31k and net with $19k(w/o depreciation). Over the last 17 years he has owned the property all years have been profitable with the average being $11k a year in net profit. From investigating on my own the seller bought the place for $58k. It has a roof that is 6 years old and a new boiler. But the appliances (range/fridge) will likely need to be updated shortly in all units (look from the 70s). Houses in the area are selling for around 60-80k. My feeling is the house is worth in the 105-110 range not 140, although I know there is huge cashflow potential. I would be doing traditional financing on the property which would not be a problem given my current job, affordability wise.

Do I seem way off on my eval at 105-110? or is his 140 offer fair? The seller is in his 80s and owned 6 properties and this is the last of his 6 to sell as he wants out of the business.

Thanks everyone!