Help me analyze this deal

[Steven Bonfante]

Hi folks,

I'm a analyzing my first legitimate deal.  I've done plenty of analysis for practice but this one will be a serious offer.

Let's start with the property description:

• Senior community (55 and over)
• 2 bed/1 bath
• 980 sq/ft
• 1 car garage
• Slab
• Built in 1973 and still looks it
• Bank owned
• On the market for 44 days

Repairs:

• New laminate floors
• Kitchen cabinets and appliances
• washer/dryer
• New bathroom
• Paint, molding, doors, light fixtures
• Central AC compressor

Numbers:

• Asking price:  $79,900
  
  • Taxes: $1580
  • HOA: $260
• Repairs:  over estimating at $24,000
• ARV: $115,000 - $120,000
• Estimated rehab/resale time: 120 days
• Profit expectations:  $20,000

I'd like to make $20k and the BP calculator is telling me to offer no more than $52k. These are nice units in a nice community and our realtor says they are selling well. I met an investor at a meetup who has done a few of these and he said about the same in respects to ARV and repair.

My concern is my offer.  We just missed out on an opportunity on a similar unit that was asking $57k that got multiple offers and settled for more than asking.

I know we have to trust the numbers but am I over analyzing somwhere?  I don't want to get stuck in the paralysis but still want to make sure it makes sense.

Any advice would be appreciated.  Hope I supplied enough info.  The analysis link is below.

Thanks,

Steve

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[Matt Motil]

Originally posted by @Steven Bonfante:

@Matt Motil  Good point about the owner occupant scenario.  I didn't think about that.  Hopefully, the saving grace is that the property is in need of major updating.  So at least that field of competition narrows a bit to those who are willing to DIY.

Yes and no. Don't forget the FHA 203k type programs where a buyer gets the funds for rehab and a FHA 203k qualified contractor does the work for them. The lender provides them all the funds with the FHA small downpayment for all of it. Hard to compete with that program if the buyer knows about it.