Help Analyzing A Start
Member since 2026 · 3 posts · 1 vote
Help Analyzing A Start
10 Replies
- 2wDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Seeing you mention what it would rent for I assume you plan to rent it. Here are my thoughts:
- I do my underwriting using the conservative of all ranges so acquisition and repairs is $129k.
- 50% rule is aggressive at that rent point.
- if you could hit the 50% rule (unlikely if properly allocating for vacancy and sustained expenses) the property is still cash flow negative at market APR. if you ignore sustained cap ex allocation, you may have minimal cash flow but it would not justify the effort and the risk.
- ARV of $155k depicts a market with historical property appreciation below the inflation rate. The implication is this property is likely to go down in value in inflation adjusted value.
- the difference between ARV and cost is not sufficient to cover holding and selling costs associated with a flip. You would be taking on effort and risk of a flip without adequate compensation.
- did you perform underwriting? What did it show? Where are you expecting the return to come from?
Good luck
- 1wGregory AcsPro MemberLender · MD · Member since 2025 · 133 posts · 52 votes
I think it's good that you're asking these questions before pulling the trigger. I'd make sure you're evaluating the deal based on realistic numbers, not just the potential equity. I'd also have a clear plan for the partnership, financing, rehab budget, reserves, and exit strategy before closing. If the deal still makes sense after stress testing those assumptions, you'll be in a much stronger position to move forward confidently.
- Member since 2026 · 3 posts · 1 vote1w
makes sense. I'm more confident than what my numbers show here, I'm leaning drastically towards the side of caution in all of these numbers. Which may not be the best thing to do for truly analyzing a deal
- 1wNicholas FloydBusiness MemberNY · Member since 2026 · 166 posts · 56 votes
Ethan, I think bringing in a partner can be a smart move, but I’d make sure the deal works on paper before worrying about pulling the trigger this week. At $109k with $15–20k in repairs, you’re looking at roughly $124–129k before closing costs, carrying costs, and any unexpected repairs. If the $155k resale estimate is accurate, that doesn’t leave a huge margin for error.
I’d want to know how you arrived at the ARV, whether you have contractor estimates, and what the property would realistically cash flow after taxes, insurance, maintenance, vacancy, and financing. I’d also make sure the partnership agreement clearly defines each person’s contribution, ownership, and exit strategy.
On the funding side, I help investors access business capital, including business lines of credit, business loans, and 0% APR business credit cards where qualified. Depending on your credit profile and LLC structure, those options may help with eligible renovation or operating expenses while preserving some of your cash reserves. I’d still want the repayment strategy to make sense without relying on a perfect refinance or sale.
Are you planning to hold this as a rental, flip it, or decide based on which exit gives you the better return?
- Member since 2026 · 3 posts · 1 vote1wHi Nick, I’m probably not providing the best numbers. The comps start at 170k, I’m using 155k to be safe. I estimated rehab at 13k, adding for things I missed and realizing I will still have an inspection done too. I’m sure it’s not a home run deal but it’s one of the only I’ve found that I feel comfortable with and I think has money to be made. Selling would be the preference and using the rent potential as more of a fallback. As far as contractors, we both work for general contractors and are more than competent at identifying issues, making repairs, or having extensive contacts who would. So if I did any rehab financing it would have to be set up to allow me to perform repairs rather than
- 1wAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Ethan, the first thing I’d protect here is liquidity. If you only have around $15K of cash available and the property needs another $15K–$20K in repairs, I’d be very careful about using nearly every dollar just to get into the deal.
The property may still make sense, but I’d want the numbers to work even if the rehab runs over, the rent comes in a little lower, or you have a vacancy right after closing. For a first deal, having reserves left over matters more than squeezing into something just because the purchase price feels attractive.
Since you’re considering bringing in a partner, I’d also get that structure clear before money moves. Who is contributing what, who makes decisions, how profits are split, what happens if more cash is needed, and how one of you exits later should all be documented.
I'd also decide which exit you're actually underwriting for. If the plan is to rent it, underwrite realistic cash flow after vacancy, maintenance, CapEx, taxes, insurance, and management. If the plan is to renovate and sell, then ARV, selling costs, holding time, and rehab contingency matter much more.
From the tax side, if you hold it as a rental, depreciation starts once it’s placed in service. If you rehab and sell, that’s generally active business income instead. So the tax treatment changes with the exit strategy.
I’d rather see you bring in the right amount of capital and keep reserves than force yourself into the deal with no margin for error.
Feel free to DM me, I’d be happy to send over a few resources that might help you pressure-test it.
INVESTOR FRIENDLY CPA®5241 Reviews - Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 302 posts · 113 votes1w
Quote from @Ethan Boyd:
I am 25. I’ve made 90-100k for the past 3 years, but since the real estate market has been so hard to reach I’ve been pouring into retirement. Now I found a property I think makes sense at 109k in a rural area but a market that supports my plans.
I only have 15k cash even if I pull out of my brokerage, (40k in retirement i don’t want to touch), I’ve toured the property in real life. With 15-20k in repairs it would rent safely for $1,100 or sell for 155k. I’ve brought in a partner to help with down payment and repair costs. Better to do that then let it pass by in my eyes.
I guess I just need help pulling the trigger this week. Please ask questions, give advice, and help see if I have answers.
@Account Closed, one thing I’ve learned from working with investors is that the feeling of “I need to decide this week” is exactly when I slow down and make sure the legal side is clean. A deal can still be a good deal tomorrow, but once you sign the wrong contract or bring in a partner without clear terms, it gets much harder to fix later.
Before moving forward, I would want to know exactly who is buying the property, how you and your partner will own it, who is putting in what money, who can approve extra rehab costs, and what happens if one of you wants to sell while the other wants to keep it. I would also make sure the contract gives you enough protection for inspection, financing, and anything you still need to verify before closing. I’ve seen good deals become stressful because the partnership and contract were treated like details instead of part of the deal itself.
I like that you are asking questions before jumping in, and I’d be glad to stay connected and see how this one turns out. Since the property is in Tennessee, I would still have a Tennessee attorney review anything specific to the contract or ownership structure.
- Real Estate Agent · Nashville · Member since 2026 · 3 posts · 0 votes1w
I’m still pretty new to real estate myself, working on the disposition side, so I definitely don't have all the answers. But I think you’re asking the right questions.
At 25, having consistently made $90–100k, built up retirement, toured the property yourself, and brought in a partner instead of trying to force the deal entirely on your own is a solid foundation.
If I were looking at it, I’d want to get really clear on a few things before pulling the trigger:
Is the $155k resale value supported by actual comparable sales, or is that an estimated ARV?
Is the $1,100 rent based on comparable rentals in that specific area?
What does your full all-in cost look like after closing costs, financing, repairs, insurance, taxes, utilities, etc.?
If the rehab runs $5–10k over budget, do you have enough reserves to handle it?
I’d probably focus less on “Do I need to pull the trigger this week?” and more on “What would have to be true for this deal to be a good decision?”
I’m just starting out myself, but one thing I’m already learning in this business is that there will always be another deal.
- Lender · Franklin, TN · Member since 2026 · 12 posts · 2 votes1w
With only ~$15k liquid that $109k deal gets tight on cash to close + reserves more than income. Before you bring a partner I'd price living there on FHA vs going conventional, and be honest about that rehab budget because CapEx will eat you. Underwrite the payment with a few months reserves left over.
- Investor · Washington, US · Member since 2021 · 58 posts · 12 votes12h
At 109k rural, the number that decides it is usually cash-on-cash: (annual rent - taxes, insurance, management, and a real vacancy/capex reserve - debt service) divided by the cash you actually put in. Rural is where the expense side surprises people, so pull the actual county tax bill and a real insurance quote for that address rather than using rules of thumb, and budget vacancy nearer 8-10% since the tenant pool is thinner. If you post the rent comps you found plus those two numbers, it gets a lot easier to say whether it pencils.
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