owner wants me to buy

[Paul Moran]

the 3 family arv about 375.000 when finished with repairs of about 46.000 no money down he will hold mortgage wants 270.000 trying to figure if this is a good deal 

[Ronald Perich]

@Paul Moran, have you run the numbers? Did you use something like the Buy and Hold Calculator the BP offers? 

I'll be honest, it is very difficult to follow your posts when you do not use punctuation. I don't know where one piece of information begins or another ends. It would be very helpful (and you might get more responses) if you use punctuation and formatting. The texting-like fashion of your posts makes it very hard to read. Hard to read = too much work for busy investors = very little response.

For example,

@Account Closed, here are the particulars:

• Sales price of $270,000. Needed repairs of $46,000.
• $1,500/mo for principle payments. No interest, no money down.
• 60 month note with balloon at the end ($180,000)
• Rents after rehab are $2,800/mo
• Yearly taxes of $5,500. Insurance of $2,400. Snow removal is $500.
• Water and sewer are $88/mo (this seems low to me?)

Do you see how much easier it is for people to read this and then answer? 

Your repair and maintenance budget is way too low at $500/yr. One toilet replacement will cost you that. What happens if you have a roof that needs replacement or a tree that needs to be cut down? Even my $3,360/yr maintenance budget feels a little low to me based on the rehab to be done on the first floor.

Now, when I plug these numbers into the calculator referenced above (including an 8% vacancy and $280/mo for repairs and maintenance), I can see that you'll have monthly expenses of $1,640.  You will have a mortgage payment of $1,500. You'll have income of $2,800.

Monthly Cash Flow is NEGATIVE $350. You will be losing money each and every month. But you will have substantial equity (something like $200,000) in the property after five years if your ARV is correct.

Now you have to ask yourself if you are buying for cash flow or equity build-up. 

A negative cash flow isn't a bad thing for some investors due to the tax write-offs they get, especially if there's a lot of equity buildup. Is this something you want/need? Can you afford to put money into this property every month to keep it afloat?