What would you pay for it??? Single Family Package Deal.

[Kaleb Joyner]

Hello BP,

I have a deal I'm looking to make an offer. It's an off market deal from an investor in my hometown. In fact, I went to High School with the owner's grandson. Anyway, I'd like to know what you'd pay for it. 

First, I do understand the risks of Single family package deals, and will inspect each property and pick the best ones. All properties are currently rented and have been consistently rented for a long time. This family owns all of these houses free and clear with a good reputation from not only the community, but their tenants as well. I've seen the leases, they look in order, etc. etc. etc. Again, obviously I will conduct all of my due diligence once under contract. However, just for purely deal analysis purposes based on the amount of gross income, I'd like to know what you'd pay for it. And yes, I do understand that many people will value this based on comps of the properties. However, that's not what I intend to do here because that value will be higher than the income valuation approach. 

So with out further ado, here are the numbers I have for a monthly cashflow statement.

$7,850 Gross Monthly Rent

$785 Vacancy (10%)

$785 Property Management (10%)

$1000 Taxes (Current Totals =$675/mo) Anticipating taxes to go up after purchase

$1000 Insurance

$1028 CapEx

$392.50 Maintenance (5%)

= $2859.50 NOI

With that NOI, what would you pay for it. Also, can you find anything askew with those numbers?

Thanks in advance for the replies!