Did I do my math right on this property?

5 Replies

Hey guys! I recently started reading a book from bigger pockets called "Rental Property Investing" and it talked about how to run the numbers on real estate. I found a short sale offer in chicago and I ran my numbers and they look bad. Just want to make sure I did it correctly. Can someone check? My numbers say I will lose $1.6k in the first year

https://docs.google.com/spreadsheets/d/1WC0UDC0PGVswV7aNwoaHPL9mBb1BjzmuG6xpoAow-Dg/edit?usp=sharing

@Mason Chan

looks about right. Where did you get the info about the rent being only $1350? Zillow rent zestimate has been somewhat accurate in the areas I focus in. It states there you should be able to rent $1500.

But you're essentially breaking even. Not a deal. 

And this is a short sale as well. 

@Chris T. was just looking on padmapper for similar condos and kinda was conservative on my rent estimate

@Mason Chan , as a buy-to-rent, as you so rightly worked out: no deal.

But, you didn't tell us what it SHOULD be worth (to an owner-occupier or developer)!

eg. if in that area it costs $300k just for land, then it IS still a deal at $175k! Cheers...

@Brent Coombs Hmm I briefly looked into that and it seems that they are selling it at market value I believe. Will need to look into it some more but a nearby condo sold for a similar amount.  The current owner bought it in 2006-2007 so they paid a lot for it and was never able to pay it off.

Thanks for the responses guys!

Originally posted by @Mason Chan :

@Brent Coombs Hmm I briefly looked into that and it seems that they are selling it at market value I believe. Will need to look into it some more but a nearby condo sold for a similar amount.  The current owner bought it in 2006-2007 so they paid a lot for it and was never able to pay it off.

Thanks for the responses guys!

Why even focus on REO's? Why would banks deliberately give away their own assets cheaply?

Aren't you interested in finding deals that are UNDER market value?

Sure, an odd REO might be a bargain - but so might be ANY listed property!

(Whereas, the REAL bargains are more likely found unlisted! Not easy to find, but, try?)...

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