DFW Possible Wholesale

[Mark Allen]

I understand that every investor has their own formula for what qualifies as a great opportunity they would act on. I wanted to get feedback on a home I came across in the Dallas, Texas area before I put the home under contract. I'm currently tied up in a fix/flip and don't have time/resources to make this happen today. I would only market this as a buy/hold opportunity given the tenants love for the home/area. Here are the details:

- 4bd/2ba 2135 sq ft SF home. Middle class neighborhood with low crime and school ratings between 5-7.

- ARV $198k (highest comp at $220k). Purchase Price $125-130k.

- Foundation issues have caused cosmetic damages (cracks, slope, etc). Estimate for foundation repair was ~$5k by two local companies.

- Great tenants (family) that love the home/area and want to stay - Open to Lease/Option. Tenant is very handy and has made several repairs on his own. They pay $1200/month. Rents go as high as $1475 in the neighborhood. Tenants would pay more if rent ready repairs made. They are living in home now without too many gripes, but cosmetic damages from foundation have opened up cracks to outside (light/air coming through home that they have plugged with plastic bags).

- Repairs for flip estimated at $37-$44k (foundation, cosmetic, flooring, windows, doors, bathrooms/kitchen, etc.). Repairs for rent ready at $9-14k (foundation, cosmetic, master bath shower, fence, dishwasher, etc.)

I'd like to hear whether the positive CF after rent ready repairs is enough for you to purchase the home. Based on feedback, I may or may not put this home under contract and attempt to wholesale for a very small profit.

[Andrew Herrig]

What is the age of the house? Looks like after repairs and assuming you could get the higher end of neighborhood rents you'd be around the 1% rule, which is tight. I personally won't buy a rental in DFW unless it's closer to 1.3-1.5%.