First deal I'm working on

[K B]

Ok so I'm fresh to REI, however I have a good team behind me and most importantly a great Mentor. Still, I don't think it would hurt to double check numbers and such here, I'm always keen on finding holes in my game.

Right now I have a distressed property about to be foreclosed on, it is part of a rental property right now with no tenant. The owner originally was seeking some form of financing, but was too deep, thus the opportunity to have a private investor step in, which would be me.

The property value is around 490k, but we have negotiated down to 367k, 75 percent of the est. value. The first is 160k, which takes us down to 207k working capital. I'll be buying this property, and rolling 24k for the first years mortgage into the deal. 183k now is left. We are rehabbing as well, the cost of which is 35k, of which 20k will be spent, and 15k pocketed. Now we are at 148k. After 15k estimated Brokers fees and a 44k Investors fee, we are left with 89k, which will be payed to the seller.

The goal with this property is to get the sellers credit back up to par, and all his finances in order so he can purchase the property back after a years time for 75% plus 10%. So assuming the property stays at its current value, that leaves another 50k to pick up on the back end of things after the first year. However if the seller cannot get his credit in check and align himself to buy back his property, I will simply throw it on the market.

Keep in mind the original safety net is 75 percent of the value at the buy in price, this is Southern Californian RE, the price will almost never drop so drastically in that short amount of time. If I have to find another seller at the end of this, I'll know well ahead of time as I'll be working to re-establish the sellers financial stability over the next year. The payments are only 2k/month, that wouldn't strain me too much if I decided to hold onto it for the right buyer.

Anyhow, I'm looking to close this week, how's it look so far? The only issue I can foresee is the possibility of this guy wanted to rent out his property after we fix it back up, but before I sell it back to him. My Boss/Mentor has said this won't be an issue if he does decide to rent it out and it won't be any concern of mine. However it seems like anyone living on my property would not only be an issue, but my tenants, even if the seller was taking care of everything.

So anyhow, thanks to anyone willing to take some time and look this over for me, its much appreciated.

-Kelsey