is this worth buying?

9 Replies

Hello Friends,

I an new so I request you all to please help and guide.

1 bedroom 1 full bath 1 half bathroom Condo

Listing price 68,000
likely to accept offer of 65,000
+ need to pay 17,000 assessments ( whole building concrete, carport, railings are being changed and upgraded )

+ rehab needs 10,000 ( appliances, rehab half bath, change vanities in main bathroom, paint cabinets in kitchen, regrout, electrical )

total 92,000

can be rented out for 1300 x 12 = 15,600

monthly HOA 608 x 12 = 7,296

annual taxes expected: 900

net income: 7404

Percent Return on Investment: 8%

is this good ?

given that market is at peak

is this good to invest at these numbers?

I an new so I request you all to please help and guide.

thank you very much,

Ravi

@Ravi S. honestly I think you found a better deal somewhere else, out of your NOI you still need the factor the mortgage if you have one, vacancy rate, maintenance & CAPEX (even when you don't rehab you should start sitting it to the side). I would imagine after factoring for those you're probably not gonna cash flow at all.

@Joseph Bass    YES Paying Cash for the whole deal

@Andrew Zannotti Paying cash so no mortgage, but yes you are correct I should plan for vacancy rate of 5% in, maintenance and CAPEX ( they have roof expense coming in 5 years which will be an assessment of 20,000 )

A question Andrew: I am first timer so I don't know much hence request you to please guide. What NOI as a % should I be targeting while looking for BRRR or Rehabs ?

@Theresa Harris Rent (after deducting HOA fees) should be equal or more 1% of Purchase price , right ?

@James Bigley Yes the HOA fees are unbelievable ( they cover common insurance and common areas utilities ), yes I agree with you they are high.

Giving Up votes to all of you for your kind help and guidance.

@Ravi S. I honestly don't have a specified number that I look at in terms of NOI. I'm on second investment property and this will be my first BRRRR so I'm honestly not far ahead of you, so I'll be refining my criteria over my next few deals. Right now I specifically look at can I get my entire invested capital back (or most of it) after refi and then at least $100 a door, right now I'm more focused on learning the process and building a team. The property I closed on was listed at 68K, after back and forth and a low as is appraisal we agreed on 51K. My rehab budget is 15 because it's all cosmetic and my after ARV from the hard loan estimated between 100K to 105K. As long as I keep my repairs on path I'll refi at 100K and have all of my initial capital back plus about 30K in equity and about $300 a month in cash flow. This is where I'm currently at in my process. Feel free to let me know if you have any questions and I'll tell you what I'm doing, it may not be necessary the best advise but I'm at least executing what I'm saying.