Would you do this deal?
Purchase price : $52k - ask $60k
ARV: ranges in this neighborhood - $65-$85k
Rents: $825 - maybe $850
Loan terms of 20 yr at 5.25% - with taxes and insurance $465/mth
In a word...Run....Run like ... (OK that's more than a word).
Total cost = $67k
Arv = $65-85k
Equity = $19k (up to...maybe, or underwater)
Rent = $850
T/I = $465
Mortg = $451 (based on your ugly terms)
CF = -$66/month (that's a negative 66).
That number, "66", is a sign to.........run...as fast as you can.
There is nothing here to see.
The cash flow is nice, but you are paying retail price once you factor in the repairs. Actually you are on the high end of retail price.
You can do better than that. As investors, we never pay retail price. There are a ton of properties out there, there is no need for you to buy anything that doesnt excite you. I would pass on this one
Now if the numbers were a bit differant. For example if the ARV was at 140k or more, I would be interested.
I would be much more interested if the seller were holding the finacing and there were no reparis needed., then I would be all in. In that case you would be able to preserve your capital and do more deals in the future.
I hope that helps
Matt Stambaugh I'm a new investor haven't done any deals yet, but based on what I've learned the numbers are too tight. You don't want to run into an issue that may cause you to break even or even worse. The purchase price is too close to the ARV.
Hope this helps.
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