How to determine an MAO between flipping and rental

[Joshua Osko]

Hi all,

I'm relatively new to wholesaling. I found a property with an ARV of 70k that needs about 45k of work. The seller is willing to sell it for 40k. On the surface this looks like a bad deal (and maybe it is), but how do investors look at it from a buy and hold perspective? This property would have a NOI of about $800 monthly (including management fees, annual repairs etc). Over 30 years $285k could be profited from the rental income with the opportunity to still sell the house at whatever market value is at that time. So I guess my question is: what is are most investor's appetite for being all in at a price above market value even though it is a decent cashflow opportunity? An experienced wholesaler I spoke with said it was a bad deal no investor would buy - he basically just does the 65% less repairs rule, regardless of whether it's a rental opportunity or not.

All thoughts are welcome!