Our first offer - Any suggestions?
My wife and I just made our first offer on a bank-owned property. We were dragging our feet after viewing the property twice (once with agent, second time with contractor and agent). Got a message today that another offer was coming in on the property so we quickly put in our best offer. From what we can tell, once this property is all fixed up it will be a cashflow monster for the price. Details:
Property Type: Multi-family (3 units + separate garage)
Offer: $25,000 cash (can't find a mortgage for that low)
Estimated Rehab: $30,000 (2 units cosmetic, appliances, and flooring - $15,000, 3rd unit - major repair - $15,000)
Total income: $2,000 (Garage = $250, 1st Unit - 3 story, 2BR/1Bath = $675, 2nd Unit - 2BR/1Bath=$500, 3rd Unit - 2BR/1Bath = $575)
After Repair Value: Range between $65,000-$75,000
I was hoping to only put 25% down on the property and do a mortgage/loan but can't find a mortgage for that low of an amount. I currently have $20K readily available to use for purchase/rehab and a few options to come up with the rest. When I run the following numbers I am coming up with over $825 in monthly cashflow (accounting for 15% vacancy, 10% capex, 10% repairs, 10% ins, 8% management) and 17-18% Cash on Cash ROI.
What do you think? Are there things that I may be forgetting to look at or think about?? Thanks for any and all advice!