My First Deal Analysis

[Brandi Williams]

I just became a Pro member last night and have been enjoying the perks, including unlimited deal analysis. I was really interested in two properties in York, SC. They are both willing to do owner financing which is my only interest at this point. The first deal turned out to be a dud for the price they were asking. Here is the information on the 2nd one. The asking price is $83,900 but I want to go in with an offer of $75,000. Please be as honest as you want to be in giving me your opinion. This would be a buy and hold, I would like to refinance the property within a year or two and get a mortgage for 15-30 years. The ARV is listed as $145,000 but I estimate it is more around $110,000-$115,000 based on comps.

Purchase price: $75,000

Down Payment: $5,000

Closing Cost: $1500

Monthly Cashflow: $242.31

Pro Forma Cap Rate: 9.04%

Purchase Cap Rate: 9.22%

Cash on Cash ROI: 44.73%

NOI: $6,918

Rent $950

Vacancy $66.50 

CapEx $47.50

Repairs  $47.50 

Insurance $67.00

Management $76.00 

P&I $334.19

Property Taxes $69.00

Total $707.69 

[Bryan C.]

I think the taxes & repairs seem a little low, but you already addressed why.  If the property recently underwent a lot of upgrades you should be fine.  Sounds like a good way to get $200/mo cashflow after all expenses.  The down payment will be the big deciding factor on whether to do the deal or not.  That will impact your monthly payment also.  Good luck on this!