Deal Anaylsis Help
I just want to run the numbers to everyone and see if this is a good deal or not.
ARV: 110K-120K
Repairs: 25K-30K 115K x 70% = 80.5K - 27.5K =
Purchase price: 55K 53K - 5K fee = 48K MAO
Assignment fee: 5K
I know this isn't exactly the 70% rule but it is pretty close and that is the price the seller verbally agreed upon. Is this too small of a margin for someone willing to flip or is that normal when purchasing in a lower price range? Also would a buy and hold investor require less of a spread since equity and sales price wouldn't be as big of a factor to them?
Also note that I am inexperienced with estimating repairs which is my biggest concern currently. It could be more or it could be less than the 20-30k. I tried to estimate generously to give some fudge factor.