Deal Analysis Help!!!

3 Replies

Hi Everyone!

So i have this deal in front of be and I'm struggling with knowing what is a good ROI that I should accept. The property is priced at 132500 has four units and im going with an FHA Primary residence on it living in APT 4 with 3.5% down. I have a max offer in my mind of $125k and the seller is asking $129k not sure if Im missing a good deal in front of me. I have pasted the numbers from my calculations below.

I also have no real worries about vacancies since this will be a student rental. 

0 Mo Yr
Sold in 14' @ 75k Asking 132500
Apt1 $ 910.00 $ 10,920.00
Apt2 $ 500.00 $ 6,000.00
Apt3 $ 720.00 $ 8,640.00
Apt 4 $ 550.00 $ 6,600.00
Heat + Hot Water $ (300.00) $ (3,600.00)
Water $ (113.00) $ (1,356.00)
Insurance $ (125.00) $ (1,500.00)
Taxes $ (414.49) $ (4,973.93)
Property tax $ (137.52) $ (1,650.19)
Electric $ (137.52) $ (1,650.19)
Cash Flow $ 1,452.47 $ 17,429.69
Sale Price $ 125,000.00 $ 125,000.00
closing cost   $ 3,750.00
ROI 0 0.135376233

Yes, that not a mistake either. It's because of all the schools and colleges in the area. But it helps me avoid vacancies.

Should my top offer be 120k of should I move to 125 which was my calculated max offer. The roi change is about a half a percent, from 14.58% to 14%.

Since im going the FHA route though my roi is lowered since im living there...not sure if i should consider this though