I'm in a multiple offers situation with a bank owned single family house. Listed for 250k and we offered 231k. They want best and final offer in 10 days. What do you guys think? is it worth it?
List price: $250k
Reno cost: $25k max
Out of pocket total investment: $41,240 ( includes downpayment acquisition cost, loan costs rehab cost)
Potential Rent Comps: $2200-$3000 in the area. $3000 was the highest and it was total rehabbed with utilities included
After repair value: $350-$420k (the comps high is actually 450 but that's done with high quality materials it look like)
We can secure 5% downpayment loan as 1st time home buyer at 4.25% int rate.
Below is my calculation based on 355k sale price (very conservative) and $2500 per month in rent which is average in this area.
|5000 propert taxes||property tax|
|3000-4500 seller side closing||seller side closing|
|$ (237,827.00)||loan balance after 1 year rent|
|$ 4,957.31||cash flow|
|$ 327,500.00||net sale price|
|$ (41,240.00)||total cash invested|
|$ 53,390.31||net profit (after 1 year)|
Are you trying to flip it or turn it into a rental? Also where is this located there are only a few markets where > $2,000 rents are the norm and will rent easily. Based on the tax rate and rent I'm going to guess Austin. Also is your loan conditioned on you living in the property or did you just get very lucky?