BiggerPockets

Please tell me if I'm forgetting something. Do I need to subtract closing costs from my max offer?

FMR (fair market rent) $1000-$1200 (I will use 1k)
50% rent- $500
Subtract 100$ for monthly cash flow = $400 max monthly payment
60K 7% 30years= $399.18/month
Estimate of INITIAL rehab:
4500 furnace
1500 chimney lined
500 flooring (kitchen and bath)
3000 bathroom repair
1000 kitchen repair (cabinets repair and counter)
500 interior paint
300 interior wall

60,000-
11,300 Total

=MAO 48,700

Heather, your figures look OK. I would subtract closing costs from the MAO since they are an expense. Jim

Wow Mike beat me to it!

Hi Heather,

I would throw in a 10% reserve as well. You never know how rehabs go and it's always good to plan in a reserve of at least 10% of what your expected Rehab costs are.

Good luck!
Chaffee

Just wondering- Is the chimney liner for the new furnace install? How about a hi efficency furnace that uses no chimney and only 2 pvc pipes run outside. Price that before spending any money on chimney upgrades. FWIW!!

I fell for that once. I increased my offer after my realtor said the listing agent told her there were 2 others higher than mine after they'd already accepted mine. After the inspection, I bailed out. And of course there were no other offers. Just my $.02

Thanks Jim,

FMV in this current market is 121K.

Thanks Jim,

I'll let you know how this turns out, it's an REO so we could be in limbo for a while:)

Heather,
Ask the Broker/listing agent to show/send you verification of the other offers. You have a legal right to see them. If I was your Buyer Agent I would
demand a copy.

Matt Mathews
Mathews Associates LLc