BiggerPockets

It's a HORRIBLE RENTAL, but would be ok for a quick flip to an ignorant newbie landlord, if you can find one. No successful landlord would buy it at that price.

Good Luck,

Mike

Any deal that you can actually wholsale and make some money is a good deal. So, if you have buyers lined, and this fits their criteria, move ahead.

As a rental, its a bad deal even at $75K.

Here's the breakdown

Rent $800
Expenses 40% of rent (Mike would use 50%)
Expenses $320
NOI $480
Desired profit $100
Left for payment $380
Max price $57,117 (7%, 30 years)

But, if you're wholesaling, it all depends on what your buyers want.

I would say as a wholesaler you'd be fine w/ doing (ARV-Repairs)X67% as the price you pay for the house. So you'd need to start a little lower to negotiate upwards. You may want to be conservative though with repairs and add 1-3k clean up costs unless your positive its in perfect shape.

The post above gets you to a "max payment", based on the rent, and assumptions about expenses and desired profit. In Excel, there's a function to calculate the loan amount from the payment. Its called "PV" for "present value". The forumula looks like this:

PV(interest, periods, payment)

Interest, payment, and periods need to be consistent. Since the payment is per month, we need interest per month and periods is the number of months. Payment needs to be a negative number, since the payment is going out. That is, the payment is reducing a positive "present value" (i.e., the loan amount) to zero. So, if we assume 7% interest rate (that's annual) and 30 years, the forumla is:

PV (7%/12;30*12;-380)

Other useful related functions include the NPER (number of periods) function the FV (future value) function, and the RATE function.

You can use NPER if you know the rate, payment, and current loan balance to calculate the number of payments remaining (say, for a subject to deal.)

You can use FV to calculate the loan balance in the future, once you've calculated the payment. Plug in the rate, payment you calculated, and present value (i.e., starting loan balance), and the number of payments you want to make, and you'll get the loan balance after that number of payments.

RATE can determine the current interest rate. Again, for a subject to, say the owner knows their payment, and how long they've owned the house and what they paid. But they don't remember the rate. If you can separate the insurance and taxes, you can calculate the rate.

I'm sure there's some "excel for dummies" book. Or look for a course in your area. The rec center here puts on a lot of various courses. The online help is fairly good, too.