Real Estate Professional · Falls Church, VA · Member since 2012 · 238 posts · 83 votes
Hi all,
I'm working with 2 highly motivated sellers who own single family rental properties in DC with established Section 8 tenants in them. I haven't wholesaled a rental property before but figured this was a good opportunity to figure out how.
My question is this: how much do I offer them for the properties? The prospective buyer would be a buy-and-hold investor, not a rehab/resell buyer which is who I usually wholesale to. The 70% MAO doesn't seem to fit, and the sellers rightly aren't willing to let them go that cheap.
Real Estate Investor · Jacksonville, FL · Member since 2012 · 109 posts · 22 votes
13y
What are other properties similar to this selling for to investors?
I would think you would simply want to buy them at a price that leaves you a reasonable profit to provide a good deal to a long term buy and hold.
I would take in to consideration that your long term buy and hold is someone who is going to want to feel like they got a good deal from a value standpoint, so if you have good cash flow and leave some equity for them I think that is probably what they are looking for.
I don't think you can base it purely on roi or anything since Roi vary across the country and it would be hard for others to say what is good in your market. And I would want to make sure the market is strong for cash buyers of long term rentals
Real Estate Professional · Falls Church, VA · Member since 2012 · 238 posts · 83 votes
13y
That's in line with my thinking Tim Delp. I also spoke to a large-scale landlord in DC today who has several thousand rental units here and in other cities. He knows the neighborhoods where the houses are and was leaning toward a 10-cap sales price which gave me a good guideline. Thanks for your response!