Turnkey Pro-Forma 101, LOL

[Account Closed]

So I'm getting to a point where I have more acquisition pipeline than I can purchase myself. I'm doing research on selling the surplus, & I ended up on the BP Marketplace. Looked through a few posts, and saw a few deals from a frequent poster that were laughable.

70k for a turnkey property on a rough street in columbus... rented for $800/mo... and the pro forma they're pitching is RIDICULOUS...

-4.1% Interest on a 30 year fixed loan. Should be 4.75 minimum.

-6% Property management. Call it 10% in a market where rents are low.

-4% Maintenance reserves. Should be at least 10%.

-4% Vacancy... I google mapped the street... and I would call it 8% (that's 1mo./year)

-$70 per month in taxes. This will double for an absentee owner. And this was based on a tax assessed value of $17,000.

-ARV is $77K... but every nearby comp on the street is $40-$50k.

-cash on cash ROI of 23%. I ran my own numbers on the same deal and got 11%.

Turnkey buyers, I get why you do it. Dealing with direct mail and contractors sucks. But pleaseeeeee know your numbers well. There are so many deals like this ^^^ selling like hotcakes. Don't buy them. Be conservative. It will make you money :)

If you don't feel comfortable dissecting a pro-forma... hell just ask me. I love numbers, I will gladly dig into samples with you.

Hope this helps someone out there!

Elliott