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I know the after repair value will be higher. This is the first deal I found that the numbers weren't in the negative. If you agree this is a good deal or bad PLEASE tell me WHY. I need help with investment/founds
Thank you for you help in advance
@Chad Barson , this could be a good deal. I would like to see a confident ARV. What are the comps like. It doesn't make sense to spend $111k on an $83k property. Even with that good cash flow, it will take almost ~5 years to payback the upfront repair costs. Ideally, you structure this like a BRRRR, so you can pull out your investment and recycle the cash.
Your numbers look pretty good. Few things to think about:
- What repairs are you doing for the $25k? Will this enable you to charge higher rent?
- You probably won't find a 4% loan, especially if you're not going to owner-occupy.
- Your down payment is low. Most loans require 25% down on an investment property.
- Water and Sewer look high at $75/unit/month. Around me it's closer to $30. Have you confirmed this with the town? Anyway to bill this back to the tenants?
- $100/month taxes is a very round number. Confirm with the town.
- Vacancy might be a bit low (I usually figure 8%), but that's super local. Might be fine.
@Jaysen Medhurst First Thank you for all the great info. I'm going to be talking to a property manager about the rent tomorrow as well as a realtor.
What do you think a private lender would charge?
I'll raise the down payment to 25%
When I talk to the realtor I'll see what they say about the water and sewer and the taxes
I'll also ask the property manager about the vacancy rate.
@Chad Barson , expect a private lender to be higher than a commercial loan, 6-8% or higher probably.
Don't trust your realtor to get the taxes and W/S costs. They're going to give you a guesstimate, at best. Call the town assessor's office.
@Jaysen Medhurst I'll add a call to the city to the list today. Thank you.