Is this a good deal??

5 Replies

Hi all, 

Here is the info on the property:

Purchase Price: $105k (they are asking all cash) 

ARV: $130k

Rehab cost: 2k - just landscaping and paint

Rent: $1050

I was hoping to do another BRRRR, but I'll leave some of my money in the deal. Would it be worth it to leave some of the money into the deal or just let this on go for now? Thanks in advance..just needing help talking through this deal. If I keep it as a buy and hold would I make my money back eventually?

A "good deal" is based on the person. This may be awesome for you and your area, but the returns aren't good enough for me. 

What kind of financing are you using? HM? Cash?

You can potentially get into the property for next to nothing but I doubt you'll have any cash flow after any debt service. It largely depends on the property taxes, any HOAs, and insurance costs.

Originally posted by @Daisy Ferreiras :

Here is the info on the property:

Purchase Price: $105k (they are asking all cash) 

Asking all cash usually implies it won't appraise and has significant repairs needed. Especially if this is listed with a realtor on the MLS. If so, how long has it been on the market and why hasn't someone else scooped it up?

Some of my best deals have required cash, but they were private party quick sale help the seller out of a jam deals. Why is this person selling? 

The goal of BRRR isn't to have NO cash left in a performing deal, it's to get most back. I'm ok leaving 10-20% in all day. That's why they call it investing ;)

 

@Daisy Ferreiras No it’s not a good deal for you! If all the property needed was just $2k to bring it from an all cash requirement to accepting conventional loan and for the value to increase by almost 30% (a 1500% return on the 2k), the owners would have done it already. It is possible but highly unlikely. How many similar properties have you worked on? Simply judging on the info you provided, I’ll tell you to stay away mainly because it doesn’t seem like you have the experience.

Originally posted by @Michael Gebremichael :

@Daisy Ferreiras No it’s not a good deal for you! If all the property needed was just $2k to bring it from an all cash requirement to accepting conventional loan and for the value to increase by almost 30% (a 1500% return on the 2k), the owners would have done it already. It is possible but highly unlikely. How many similar properties have you worked on? Simply judging on the info you provided, I’ll tell you to stay away mainly because it doesn’t seem like you have the experience

that’s my thought exactly. It generally did not make sense to me how it would need such little work for it to appraise that much. I figured I was missing something which is why I posted. I let this one go for now. Thanks for the input! 

 

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