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Updated over 4 years ago on . Most recent reply
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$175 cash flow but CoC 3% - Would you buy?
I am getting to be “too close” to this deal so... would you invest in this?
I’m already under contract but can back out during due diligence.
-118k price
-7.5k closing costs (so high!)
-20k repairs
= $145k all in
-ARV is 160k
-Rent $1350
-$175 cash flow/mth
So all in all there's low CoC at around 3%. Requires $51k out of pocket. The area appreciates quickly.
I suppose my hesitation is that it requires a lot of work to renovate and maybe my $50k could be more efficiently used elsewhere. On the other hand it took me forever to find a deal that cash flows.
Would you buy this house?
Most Popular Reply
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Really does depend on your strategy. Not much room for a flip here as ARV - purchase + repairs pretty much gets eaten up by the sales costs. Cash flow is actually 4.1% [($175 x 12)/51,000] which isn't terrible if your strategy is to hold a few years for potential appreciation. How solid is the $20K repair number? If this fully loaded or a rough guess? Can you beat 4% return for the same level of risk elsewhere seems to be the question.