Learning How to Analyze a Deal

[Crystal Aasir]

So, basically I wanted to start practicing analyzing deals. I saw a house here in Atlanta for 14,900. The last 5 homes sold anywhere from 58 to 68k the closest home comparable  was sold for 65k. The home is 3bd/2bth built in 1950. If the home had no more than 30k in repairs that means the profit would be around 20,000. I havent accounted for Agent commissions but would this be a pretty solid deal. Its been on the market for quite a while. I just wanted to know you guys opinion.

[Mark Graziano]

Quick and dirty analysis

ARV - 58000

Purchase price: 14,900

Closing; $1000

Holding cost (utilities): $400

Taxes (200)

Rehab; 30,000 

Selling costs: (6%) 3,460

Closing Asst. (1%) 580

Potential Profit = $7460

Rough estimate - you have to be very strict on your rehab cost - a 5k overrun will potentially kill this deal.