The first really good deal I've found... I think!
Hey guys! Like most folks in this sub-forum, I'm hoping I can leverage the experience of you guys! I've grabbed a screen shot of the BP rental calculator, and using whatever information I could find on the listing, and through the broker, this feels good. it's a cash only deal(seller preference) on a tri-plex. I've attached the screen shot of the numbers. Additionally, using my own calculator provided by a broker friend of mine, I feel good.
The rental income is based on all three units being rented, currently only 2 of the 3 are rented. There is an estimated $400 less coming in currently. According to the listing broker, there are no outstanding major repairs or tax liabilities on the property. This is what I think is considered a "B" neighborhood. Here are the two analyses:
| Initial Investment | |
| Purchase Price | $89,000.00 |
| Closing Costs | $2,225.00 |
| Renovation Costs(allegedly turn key) | $3,000.00 |
| Total Investment Costs | $94,225.00 |
| Financing Costs | |
| Down Payment (%) | 20.00% |
| Down Payment ($) | $17,800.00 |
| Mortgage Balance | $71,200.00 |
| Annual Interest Rate | 4.00% |
| Loan Term (months) | 360 |
| Total Invested Capital | $23,025.00 |
| Fixed Monthly Operating Expenses | |
| P&I | $339.92 |
| Financing Charges | $0.00 |
| Administration Fees | $12.50 |
| Property Taxes | $197.08 |
| Homeowners Insurance | $111.86 |
| HOA Fees | $0.00 |
| Fixed Monthly Total Costs | $661.36 |
| Variable Monthly Operating Expenses | |
| Property Management | $157.50 |
| Advertisements/Referrals | $65.63 |
| Vacancy & Collection Losses | $131.25 |
| Capital Expenditures Replacement Fund | $50.00 |
| General Maintenance Fund | $50.00 |
| Temporary Utilities | $10.00 |
| Pest Control (Optional) | $0.00 |
| Lawn Care (Optional) | $0.00 |
| Total Variable Expenses | $464.38 |
| Total Monthly Expenses | $1,125.74 |
| Annual Operating Expenses | $13,508.86 |
| Operating Income | |
| Monthly Market Rent | $1,575.00 |
| Annual Gross Revenue | $18,900.00 |
| Monthly Profit (or Loss) | $449.26 |
| Annual Net Profit (or Loss) | $5,391.14 |
I present to you such a thorough analysis in the attempt to make sure I'm not making any glaring mistakes! I got a recommendation from "The book on flipping houses" which I thought was pretty good...
If you've made it this far, and you are an active investor interested in this deal, I would love to partner with you. I'll completely hand the deal to you, in exchange for you carrying me through your entire process and $3200 (~20% of the estimated profits from the first three years). I get to learn a TON, you only have a little extra work to keepme in the loop, and you get a deal at less than a wholesaler would charge.