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 $129k not sure if Im missing a good deal in front of me. I have pasted the numbers from my calculations below.
I also have no real worries about vacancies since this will be a student rental.
|Sold in 14' @ 75k||Asking 132500|
|Apt1||$ 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|
I have currently offered 120k and the seller wants to wait on other offers
Looks pretty good but for a property that’s worth 130 k with Taxes at 5,000$
And Insurance 1500$
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