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Updated over 7 years ago,
Can someone help me with a small portfolio of SF's?
Hello All,
I thought maybe I would see if anyone would be interested in a small bit of mentor-ship to help analyze an offering of 5 single family occupied rentals. Just curious if anyone could take a few minutes to critique/recommend adjustments to a deal I was just presented with...
The seller had a residential real estate agent BPO at the prices below. On my phone call I explained to the seller I am looking at the portfolio from an income perspective and would not be offering at a price similar to the BPO value (single family/owner occupy).
My thought was to get the owners lowest acceptable price as a package and lowest price on a per property basis. I could see if I could whole sale them individually or as a package. If I was able to meet the owners price point, I keep any profits above that amount, for simplicity and conceptual purposes lets say they state a price of $500,000 for the package, if I was able to get $550,000 I would keep the $50,000 as my fee. I also thought I could market these on an individual basis and try and get top dollar and market to owner occupants for the next 9-12 months using the same concept above, but with one tweak... If I was able to get top dollar per property and eliminate realtor fees for 4/5 properties, I would get to keep the 5th property for myself; deed over to me, no mortgages on any of these properties. They have all had many updates and have .very little in Capex from what I can see from pictures, but I still included $6,000 for the year. All occupied with year long leases in place. From my research on market rent the properties are around $50-$75 below market average per property.
Hoping a few people could lend a some ideas or advice on anything I may be over-looking or provide another perspective or analysis...
*Owner is selling because of age.
* I started with $0 and am at $12,000, (just closed my first wholesale deal earlier this month) just looking to build capital reserve and hopefully find a deal I can start building my own portfolio on.
* Add in any financing and the deal is too skinny.
* Any owner occupant buyer will need to kick out renters (I assume most are not interested in dealing with also the current owner isn't too excited about buying out leases)
| PROPERTY | A | B | C | D | E | |
| ROOM | 4 | 2 | 2 | 2 | 2 | |
| BATH | 1.75 | 1 | 1.75 | 1 | 1 | ANNUAL |
| RENT | $900.00 | $875.00 | $1,000.00 | $725.00 | $725.00 | $50,700.00 |
| PROPERTY TAX | $155.08 | $151.92 | $160.42 | $138.33 | $97.08 | $8,434.00 |
| INSURANCE | $100.00 | $100.00 | $100.00 | $100.00 | $100.00 | $6,000.00 |
| ELECTRIC | Tenant | Tenant | Tenant | Tenant | Tenant | $0.00 |
| GARBAGE | Tenant | Tenant | Tenant | Tenant | Tenant | $0.00 |
| WATER | Tenant | Tenant | Tenant | Tenant | Tenant | $0.00 |
| CAPEX | $100.00 | $100.00 | $100.00 | $100.00 | $100.00 | $6,000.00 |
| MAINTENANCE | $100.00 | $100.00 | $100.00 | $100.00 | $100.00 | $6,000.00 |
| MONTHLY CASH FLOW | $444.92 | $423.08 | $539.58 | $286.67 | $327.92 | $24,266.00 |
| TAX ASSESSED | $90,000.00 | $89,000.00 | $98,000.00 | $81,000.00 | $56,000.00 | $414,000.00 |
| BPO | $130,000.00 | $140,000.00 | $145,000.00 | $110,000.00 | $105,000.00 | $630,000.00 |