Lump Sum Wholesale Fee Vs Cash Flows

[Josh Justiniano]

Hello! Any savvy investors want to take a shot at this one?

Here is my dilemma:

I have a property in escrow right now and am wondering whether to wholesale for a lump sum, or purchase for cash, rehab and sell on a lease option.

Here are the numbers:

ARV 90k

Purchase Price 37K

Rehab 20k

Assuming my money partner refis for 65% LTV; and sale in 3rd yr, after all is said and done here are the numbers and cash flows rounded:

Period 0 – (-$57,700) Period 1 – $72,000 (Because of Refi & Cashflows)

Period 2 - $6400 Period 3 - $31,000

Total – $51,500

NPV Based on 25% Discount Rate - $19,700

Basically, because this is a no money down deal for me I will be receiving only 25% of all benefits. Here are my projected cash flows rounded:

Period 1 – 4,600 Period 2 – 1,600 Period 3 – 6,600 Total – 12,800

NPV Based on 25% Discount Rate – 8,100

So, does this mean that if I wholesale it and receive 8,130 dollars, it will be a wash for me? Maybe I am misunderstanding the NPV calculation.

At what amount or price would I need to wholesale for it to be equally beneficial to me? Also, what math do you use to come up with that conclusion?

Thanks!