Package Deal w/ SFRs and Duplexes - The Offer Would be LOW!

Package Deal w/ SFRs and Duplexes - The Offer Would be LOW!

Member since 2020 · 9 posts · 2 votes

Hello BP! Newbie here. I've been crunching numbers at my computer the past several minutes - tell me what you'd do in this scenario:

-6 properties for sale (mix of SFRs and duplexes)

-Total asking price for all 6: $104,000

-Repair ranges (based on $15 [minor]-$20 [moderate]-$25 [major] per sq. ft. "quick" estimates):

$75,435 (min.) - $125,725 (max.) in repairs

-ARVs for all 6: $160,300

-My calculated MAO 1: $28,195 (with minimum repair estimate); MAO 2: $-21,530 (with maximum repair estimate).

A quick check at the county assessor's site shows the properties are more than 60 years old.

I would need to continue due diligence (mortgages, tax/other liens, etc.). 

What plan of action would you take in this scenario? No action is always a perfectly acceptable plan too...Thanks in advance for your input!

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Real Estate Agent · Merritt Island, FL · Member since 2017 · 974 posts · 1k+ votes
6y

@Christina H. - Based on your repair estimates, the total cost of purchase and repair is $179,435 - $229,725. You also said that the ARV = $160,300.

So you're asking what we'd do if being offered the chance to overpay $19,135 - $69,425? Did I get that right?

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  • Real Estate Agent · Merritt Island, FL · Member since 2017 · 974 posts · 1k+ votes
    6y

    @Christina H. - Based on your repair estimates, the total cost of purchase and repair is $179,435 - $229,725. You also said that the ARV = $160,300.

    So you're asking what we'd do if being offered the chance to overpay $19,135 - $69,425? Did I get that right?

  • Member since 2020 · 9 posts · 2 votes
    6y

    @Tchaka Owen Thanks for your reply. No, I mean I would only offer $28,195 for all 6 properties...it would be a low, low offer based on my calculations.

  • Specialist · San Antonio, TX · Member since 2012 · 865 posts · 351 votes
    6y

    @Christina H. how would you pay/ Finance this package if it was a deal? 

    It’s amazing how most folks talk numbers without the Financing part in mind.

  • Member since 2020 · 9 posts · 2 votes
    6y

    @Account Closed I would pay cash for the offer. What would you do in this scenario?

  • Real Estate Agent · Merritt Island, FL · Member since 2017 · 974 posts · 1k+ votes
    6y

    @Christina H. - Ok, that makes sense. I suggest you see each property and estimate repairs. I would offer $20k if total rehab is at $70k. If higher, I'd walk. The only exception is if rents are very high (we don't have any info on that). If total gross rent is around $3200/mo or higher, perhaps I'd look into it more. 

  • Member since 2020 · 9 posts · 2 votes
    6y

    @Tchaka Owen Thanks again! Rents in this area range from $500-$650 per month. This may mean for the 6 units gross rent range = $3000 (low) - $3900 (high). 

  • Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    6y

    @Christina H. I'm guessing your ARVs are off. What are you using to determine that ARV ?

  • Member since 2020 · 9 posts · 2 votes
    6y

    @Caleb Heimsoth Thanks for your reply. I used Realtor.com, and the highest assessed value(s) I could find for each property - presumably when they were each in their "best" condition. Each property now is in rough shape to say the least, and many homes on the blocks are also distressed...The ARVs may be off somewhat - I didn't have the agent pull the comps. This was just my initial online research. I did contact the listing agent/broker by email to ask a list of questions (any liens, property tax, comps, vacant, monthly rent, condemned). And, as of today there is a verbal offer that has been accepted, and the realtor is just waiting for signatures. I asked to be kept in the loop in case that deal falls through though.

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