Fort Bragg, NC · Member since 2017 · 27 posts · 15 votes
What do you guys think? The average rent for this property would be around $750 or so. Also could maybe be a flip as well if everything looks good when looked at? Any opinions and advice will help!!
Investor · Saint Louis, MO · Member since 2017 · 89 posts · 44 votes
9y
Numbers are no good, even before the rehab. Try using the rent x50 rule of thumb, there are dozens of these rules, but I like this the best for me. If it rents for $750 then the most you could purchase it for would be $37,500 minus the rehab costs. So probably a 10k offer.
Fort Bragg, NC · Member since 2017 · 27 posts · 15 votes
9y
Kurt McDowell I know I'm a little late to respond to this but can you explain what you mean about the rule? I don't get it. Can you give me an example?
Investor · Greenville, SC · Member since 2017 · 69 posts · 15 votes
9y
So the 50% rule is a rule of thumb that implies that you would need about half of the rent (50% or $325) as reserves for vacancy, repairs, capital expenses, and possibly management. That would leave just 50% or the other $325 to pay for the mortgage, tax, and insurance. This would mean that you would have to pay less for the property depending how much rehab you would need to pour into the property. Hope that makes sense
Investor · Saint Louis, MO · Member since 2017 · 89 posts · 44 votes
9y
50x rule not the 50% rule. The gross monthly rent times 50 equals the purchase price minus repairs. So duplex rents for 800 and 700, gross is 1500, 50x rule says purchase for $75,000, but $30,000 in repairs needed. So buy for $45,000, offer $30,000 probably.