How do I structure this deal ? and best exit strategy.

[Eyan Lakhani]

Hello everyone,

This deal has a room to be creative so I thought lets take advice from the bests:

Here it goes:

ARV: 235K

Repairs: $7,000 (Was completely remodelled in 2013. In great condition. NEW FOUNDATION, NEW ROOF)

Tenant Occupied: Rent $1,590 (lease ends on Aug 31)

Clearly, there is no cash-flow when I plug in the numbers on BP Calc as a Buy & hold.

If seller is willing to owner finance with 15% down and I can close this at $185k.

I believe I need $45k cash (25k down and 3k closing cost,7k for repairs, 5k holding cost, Reserves: 5k)

DIY: Without any flipping experience, I think this is a good start with nothing to minimum repairs and decent equity.

Math: ARV (comps): 235k

Holding cost: $5100 (1700*3 months)

Repairs: $7,000 (To get conservative numbers, should be 3-5k)

Realtor comm when selling: 14k (235k*0.06)

Closing *2: 6k

Profit = 235k - (160k + 45k + 14k+ 6k) = 10k

All the numbers are super conservative. I know its little profit compared to a 200k+ flip. But I am thinking if I can risk 45k to make 10k in 3 months, is it worth the risk ?

Things to consider: I may save 7k on realtor if necessary. Also, 2 off the 3 properties used in comps were sold in 2015. The prices have gone up since then.

And most importantly, I might be able to get seller finance for 160k over 20 years @ 5%. This will allow me to sell it a little higher. (Worst scenario everything same with 5 year balloon)

My question to you is:

1) Do you think this is good deal ? If yes,

2) how much do you think an investor would pay me to step aside and take over ?

What do you think bigger pocketers ??

PS: I will try to start paying after 60 days to reduce holding cost. Please suggest if there is anything else I can do to benefit from structuring owner financing.

Tag: San Antonio, Houston, Dallas, Austin and Texas