My partners and I are about to start advertising a 3-property package, and this will be our first time to trying to sell to other investors (as opposed to marketing to traditional home buyers).
We are looking for your advice, as investors, if this offer seems attractive. Would these #s make you interested? Should we try to raise the price?
Any advice is truly appreciated!
The 3 Property Package - Two all brick, ranch style homes(4/2, 3/2, plus one condo (2/1)
We think we can sell the properties individually for $400,000, but we've agreed internally to give a buyer a small discount for buying all three properties as an investment package (maybe $390,000). Tenants pay all utilities. Long-term contracts (3 yrs) in place for 2 of the properties. The condo is freshly remodeled and rent ready for max rent. At $400,000, this deal offers a fantastic annual 28.0% return.
The Pro Forma
At $400,000 the Cash-on-Cash return is fairly valued by the following...
$38,400 Annual Cash Flow from All Rents (monthly: 1,400, 1,100, 700)
- 9,070 - Property Tax & Insurance (approx; 7,630 tax, 1,440 insurance)
- 1,920 - 5% Vacancy
- 3,000 - Annual Repairs ($1,000/property)
- 2,000 - CapEx HoldBack
$22,410 - NOI (Net Operating Income)
/ $80,000 - 20% downpayment
28.0% - Cash-on-Cash Retur
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