Wholesale Deal-Price Analysis

[Chris Daliani]

Hello,

I have a wholesale deal I have been analyzing. This is my first investment property to analyze ever and I would like to know thoughts of the BP community. The property is in need of rehab. The rents are estimated to the best of my ability based on comps and geographics. I may be able to get slightly more once renovated but I would rather stay conservative on this. If we were to flip it I may be able to get 290-310k for the flip. I am not sure how to analyze proper pricing based on the NOI.

Below is my analysis for the property. Please let me know how I did and what I may be missing.

Property Description:

2 Family

3 bedrooms

2 baths

1 Furnace

1 water heater

Lot size: 50x122

Built: 1890

Sq Ft: 1688

Purchase Information:

Asking: $175k

Repairs: $90k

Closing Costs: ????

Total: $265k (without closing costs)

Financing:

Cash offer

Income:

Unit 1: $1,100 (potential)

Unit 2: $1,600 (potential)

Total potential: $2,700

Gross Income: $32,400

Expenses:

Vacancy: 10% $3,240

Utilities: ?????

(Water/Sewer,Trash, Gas)

Taxes: $9,300

Insurance: $1,200 (estimated)

Mntnc/Landscaping/CapEx: $3000

Yearly: $16,540 (without utilities/closing costs)

NOI = Income – Expenses = $15,860

Cash Flow = NOI – Debt Services (loan) (cash offer)

ROI = Cash Flow / Investment Basis

COC = Cash Flow / Investment Basis ($15,860/ $265,000)= 5.98%

5.98% without utilities and closing costs...this would only go down further with those added expenses.

Being that the house is not properly insulated heating will be through the roof. We would have to look to separate the utilities. I have not been given any utility expenses on the property.

Please give me your opinion on this, or perhaps an offer amount that may work.

Thanks