I wanted to share this deal with the group:
I just signed a contract on 2 rental properties for sale with an investor who was living around the corner. I showed him the two homes and he immediately signed contracts and put up the earnest money. He's closing in 2 weeks. Here was the deal:
Appraised Value - $215k
Equity - $115k
Gross Rent: $20,700/Yr - $1,725/mo
Taxes: $6,242/Yr - $520/mo
Insurance: $1,200/Yr - $100/mo
Prop Mgmt: $1,560/Yr - $130/mo
Total Expenses: $9,002/Yr - $750/mo
Cash Flow: $11,698/Yr - $974/mo
Just curious how you're arriving at that Appraised value... are you really implying that he bought the home for less than half of FMV?
Looking at rents, that's .8% of FMV monthly. I thought the 2% rule was pretty easy to hit in that part of Ohio.
Don't get me wrong, solid deal in my neck of the woods in Utah... I just thought Cleveland offered better.
Yes its FMV, maybe off by a couple thousand. Also I make my deals very attractive for investors so they are no brainers. Tenants have 2 year leases, houses are exceptionally well cared for and in suburbs and I'm still making tremendous profit.
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