Real Estate Investor · Ste. Genevieve, MO · Member since 2009 · 363 posts · 944 votes
6y
I don't know all the details (and that report does not give many of the essential ones) but I can tell you that the expense ratio will be far higher than 25% (more like 30% to 40%) and that the cap rate is far too low to interest most people. But there are many components to a deal other than just the price, such as infrastructure, age of homes, location and potential rent increases, so there may be much here that is positive that I just can't guess from that summary report.
Clearly you would NEVER want to buy a property that has negative cash flow and a negative ROI unless you have concrete steps to fix that immediately.
Thanks Frank, I would not consideR A negative cash flowing deal. The terms in the report are those provided by LA.
I am working on trying to understand the BP calculator and how to get more details incorporated. I plan to develop an offer based upon a desired cash flow.
Rent rates and other value adds are topics I am interested in learning more about.
The location is a good one and is experiencing good economic and population growth. The homes are either privately owned or on a lease to own program. The age of the untis are mostly mid 90s to mid 2000s.
Real Estate Agent · Merritt Island, FL · Member since 2017 · 974 posts · 1k+ votes
6y
@ROBERT M KIRILA - without looking at the calculations, I can tell you right at the start there's a problem. You're buying at $45k per door and renting at $267/mo per door. Do you see the problem? The listing says rents are below market. In your opinion, what is fair market rent? Let's start there.