Sounds like a great deal, maybe!

[John Sherron]

Hey BPer's! Question? I found a fsbo, that is looking to sell 3 of there single family homes. The numbers are looking good so far but not quite enough information yet to know for sure. They tell me they are selling because they no longer live in the city. I too do not live in the city but have family there (My hometown). What should be my next steps in determining if this is a good deal or not? If so, what should be my next move after? Thanks in advance!

[Robert Leonard]

I am glad you are asking these questions and looking into all of the numbers.  That's how you learn.

Are the current rents below market?  $53/month per property doesn't sound very compelling for a hold.  $600/month rentals can be management intensive and your operating expenses will be much higher. 

 Property condition is a huge concern.  A single HVAC repair can easily wipe out a year of your projected capex for all 3 properties.  Tip: Check all labels on HVAC systems for age and refrigerant type (R-22 is bad, 410A is good).

$5,250 Down Payment? That's 3.5% of $150k.  That's only available for owner occupants unless you know about some kind of special program?

I wouldn't call that whole $60,250 equity.  $14,750 is coming from somewhere and real equity is based on your total cost basis.  So $40,250 is a more accurate number to count as equity - the rest is your money that is "in" the property.

Are these brick or wood frame structures?  Painted or wrapped in vinyl?

What are the roof conditions and approximate ages?

What are the repairs that will cost $6,500 and how did you get that estimate?