What Type of Deals Do Landlords Prefer?

Question

I've landed my first contract. From my understanding this property would do best as. a buy & hold based upon the area, market etc, but I'm not 100% confident on the numbers. Take a look and let me know what you think about this from a landlord/investor's perspective. How do you feel about the numbers.

The roof- about 12 years old Hvac- about 8 years old

Laminate floors (living room)- about 3 years old

There is a 14K mortgage loan that the owners will pay off with their cash offer.

This is a C neighborhood, with several renters in the area. This area is beginning to “transition” with flipped homes selling between $130-200K in the 28031 zip code.

Within the last 120 days, homes within 1/4 miles of the 2212 Roosevelt Rd have sold for CASH between the $34K-$55K price point.

Asking: 37.5K or best offer

ARV: 600-777 monthly Rehab: 10K Tenant Occupied: Lease ends 8/2021

Tenant Rent: $400 Paying Tenant: Payment history available Lease Agreement: Available Updated

Laminate Floors: about 3years old HVAC: about 8 years old Roof: about 10 years old

Kitchen needs to be updated. Bathroom needs to be updated. No Flood zone. Recently painted interior walls. No tax liens

• Zoning: SF6
• Zoning description: Single Family Res 6

• Foundation: Crawl/Raised
• Roof: Composition

What do you think about this deal?

Porscha Jackson · Answer

Hey Nathan,

Thank you for the feedback. The ARV I used was meant to show the new rent price once rehab was done on the place. I'll rephrase that part from here in out. It's a solid deal, but I feel it's sort of a niche buyer that'll want this deal since it's currently occupied. If you know of anyone tell them, I'm open to negotiate.

Porscha Jackson · Answer

Thank you so much for your feedback Dan. It seems like you feel this deal would attract investors if there wasn’t a tenant in place....or if the tenant was paying more money in rent.
The ARV I used was pertaining to the new rent prices once the home was rehab'd. I'll use a different approach to this since it's confusing, so thanks for helping me notice that.

Nathan Gesner · Answer

This looks like a 1% deal if your numbers are correct, and it sounds like a lot of upside if the ARV is correct. I have to question the ARV if there are multiple homes selling in the area for around $50k.

But you know the situation better than I do. If your numbers are accurate, it looks like a good deal.

Dan M. · Answer

The ARV is after repair value but here it says 666/777 monthly not sure what that means. To me if the actual resale is 135k this would make a great flip but with a tenant in place it would be difficult to resell and do the repairs. If they are only paying 400 a month this would not be attractive to an investor really for buy and hold but that depends on taxes insurance etc. Though with given enough motivation for them to move out it definitely could make a great flip and buy and hold once repaired / rents were raised to market.

What Type of Deals Do Landlords Prefer?

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