3bed 2 bath rehab project - deal or no??

[Jamael Reed]

Holding costs per month

Taxes- $73.05 ($877 annual)

Insurance-$62 ($740 annual currently insured at $117,000 with NREIA insurance company-investor friendly)

Water/Nipsco-Estimated $175

Total=$310.05

90 start to finish total=$930.15 (rehab to sold since you need 90 day seasoning anyways)

Broker commission-$6900.00 (figured 6% brokers fee at $115k- I would list at $119,900 and I've used 5% brokers before no problem)

Total out of pocket holding costs- approximately $7831

Purchase price (out the door depending on your HML costs) $59,000

Rehab-$25,000 (which I think is 5k high or so)

Total purchase and rehab cost=$84,000

Figure a low selling price or some seller concessions at $115,000 (list at $119,900 and sell at $115,000

-Holding costs/realtor costs $7831

-Purchase and rehab $84000

Total net profit=$23,170

Remember that's net profit after expenses. Assuming you don't sell at ask, pay a realtor 1% higher than you should, and spend $25,000 on rehab-which I doubt you will. I've also sold crappier houses with less rehab to out of state buyers at $90-100k. That being said, your investor is super safe because your worst case is selling as a turn key rental for still more than you have in it. Rents are $1200-1275 or so pretty easy on those houses. And at $84,000 you're still at 70% ARV you could even cash out refi with 30% plus equity. There is basically so many outs, that your investor is super safe-the key to building lender relationships.