Deal Anaylsis Help

5 Replies

I just want to run the numbers to everyone and see if this is a good deal or not.

ARV: 110K-120K

Repairs: 25K-30K                                    115K x 70% = 80.5K - 27.5K =

Purchase price: 55K 53K - 5K fee = 48K MAO

Assignment fee: 5K

I know this isn't exactly the 70% rule but it is pretty close and that is the price the seller verbally agreed upon. Is this too small of a margin for someone willing to flip or is that normal when purchasing in a lower price range? Also would a buy and hold investor require less of a spread since equity and sales price wouldn't be as big of a factor to them?

Also note that I am inexperienced with estimating repairs which is my biggest concern currently. It could be more or it could be less than the 20-30k. I tried to estimate generously to give some fudge factor.

@Christopher Salazar Thanks for your input!

I actually got the deal under contract last night and I was able to negotiate it for $48K!!

Now I just have to secure a Buyer for the property. It is pretty exciting but also a little nerve wracking since this is my first deal but I have already learned so much just from going through this process. I am just thankful I actually decided to put the books down and take some action!