Negative cash flow deal in Raleigh,NC? Would you do the same?

[Patrick Knapp]

Real estate can be for the most part easy, especially if your a realtor. Haha just kidding, but seriously it pretty much is right. You make an offer, spend some money and get money from people in return to live in your place. Well…… lots of people say deals are tough to come by and in todays market feeling impossible! But is it really ? Or are you just not looking in the right way?

I’m gonna tell you about this deal I just made and offer on and got accepted, so tell me your thoughts.

Location: Downtown Raleigh one minute from historic Oak Wood.

Property type: Duplex 2700 sq ft

Asking:575k

Purchase price: 550k

Points at closing: 2.5

Interest:9.9%

Days to close in offer: 7

Financing: hard money

Currently renting for $2850

Leases end in 6 & 10 months

Repairs: $55,000 at my costs being a Licensed general contractor

27k outside

28k inside

ARV: 900k+

Plan: performing repairs on outside of home and get renters to move out as soon as possible. Offer to pay first months rent at new place or something. And than finish repairs on inside or if I can do both and than have them out great!

Afterwards I plan to Airbnb each side! On average the area will bring 200-400 a night each side by my research. All depends on time of year and ect…

So 8k every month at 50% capacity. Shoot low and be happy when it hits high.

Would you have done this deal? We are talking 2200 a month in negative cash flow temporarily. And also tons of equity and possible big cash flow.

Tell me what you think?