Hello everyone new to bp. I have a motivated seller owns free clear triplex. She and husband that is soon to pass away. They are asking $53,500 for house went to see it yesterday distressed property needs a lot of work, estimate 40k and the arv will be 150k. Hard to find comps near by for triplex just because there not any in this area but duplex newer in last 10 years go for 128k.
Her is their major issue they have one of the units rented they get 300 month, and they have another tenet moving in 15 of july but that unit needs at least 4k worth of work after last tenet destroyed the place. the last unit need total remake estimate 10k and basement
I was wondering what to offer for property and do lease option, no money down any suggestions on matter greatly appreciated I want it for buy and hold for my portfolio.
I have the money 4k to fix unit and time to do it. But i dont want to put money down just make low payment for property of time until I get finance 3 yrs.
I need help got ideas in head need to put on paper but i know im missing something need all the help i can get to structure profitable deal for me and my family all about legacy building. thank you all and god bless
Quick math says its a good deal at $53.5K. Assuming your are confident with your ARV and your rehab costs, start with the $150K. Deduct 10% to be a bit conservative so you're at $135K. Now deduct 70% and you're at $94,500. Deduct your rehab cost of $40K and you're at $54,500. See if the Seller will finance the deal at their asking price of $53,500 for one year while you rehab the property. Basically they will get a decent interest rate for a year while they wait for their money. They have no headaches with tenants and you could even pay them off sooner if you complete the rehab sooner and can refi sooner. Find a HML to lend you the $40K and hopefully you can complete the rehab in 60 days or up to a few months to minimize the interest you are paying on the $40K. After six months you can start to look to refi the property and pay off the $93,500. You should have plenty of equity at that point. Work to figure out how to reduce the $40K and hopefully the property cash flows. You haven't supplied any income or expense info so that's a whole other analysis. At a minimum you could flip the property after the year but you indicated you wanted it to be a buy and hold. Good luck @Cornelius Burton .
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