2 Deals: Which is better?

[Michael Miller]

Howdy y'all,  I would appreciate some insight into my situation.  I have two deals, but I can only finance one.

First deal: 4-Unit Building for Buy-and-Hold

-28,00 down, 188,000 asking price (about 85-90% market value assessed through comps)

-owner financed for two years with refi-balloon, owner pays insurance and taxes AND will take ALL of my payments toward principal (28,800 over two years), leaving me with 131200 left on principal after the two year period

-property is in a small, clean, safe, and well-to-do 'podunk' town between three of four of this area's biggest cities, allowing less than a 20 minute commute to all of them

-the property will likely need few, if any, repairs and cap-ex over the next few years as it was gutted and completely rehabbed 18 months ago

-I would be paying ALL utilities and internet access, at least for the first two years prior to my refinance

-proforma:

	After Purchase
Rents	3000
Facilities income	100
Gross Operating Income	3100
Taxes	100
Insurance	90
Vacancy @8.33%	250
Maintenance @6%	180
Management @10%	300
Refuge	20
Water / Sewer	100
Cable	150
Gas and Electricity	400
Net Operating Income	1780
Debt Service	600
Cash Flow	1180

		During 2yr Leasing
Rents		3000
Facilities income		100
Gross Operating Income		3100
Taxes		0
Insurance		0
Vacancy @8.33%		250
Maintenance @6%		180
Management @10%		0 (I will manage)
Refuge		20
Water / Sewer		100
Cable		150
Gas and Electricity		400
Net Operating Income		2050
Debt Service		1200
Cash Flow		780

Deal Two: 3/1 for partial rehab and flip OR buy-and-hold

-in a family-neighborhood with good schools (where children in the public schools get free college eventually), in the wealthiest and fastest growing of those 3 cities mentioned above

-needs a 50% rehab (ALL new appliances, new kitchen, new windows, full cosmetic throughout

-has a basement and space for a master bath to make it a 3/2

-comps in the area run 80K to 100k

-monthly rental price could be 1100-1300

-buying it from a wholeseller with whom I could establish a relationship for future benefit

-Estimates:

Purchase Price	19000
Repair Costs	24000
After Repair Value	90000
Purchase Price % of ARV	21%
6% Agent Commision	5400
Closing costs	1200
Carrying Cost 4mths: tax	580
CC: Utilities	1000
Net Profit	40200