First Rental or Wholesale?

[Mogi P.]

Just got word from my realtor that offer was accepted for this Fannie Mae property. Not under contract yet. I have 2 days to supply EM.

3/2/2 1580 sqft built in 1968
list: 54.9k
accepted offer: 39.5k + seller 1k closing costs (homepath financing)
repairs est: 25k (new roof, kitchen, and one new bathroom. I think I can salvage the master)
ARV: 80k (conservative, recent comps showed 85k but had large DOM number)
Rent comp: 900-1000 (depends on the rehab)

TI: ~300
PI: 240
cash flow: 210 based on 900 rent
annual ROI: 8.5%

What do you guys think? I say not bad, but not great. My realtor who also invests offered to be end cash buyer for double closing if I decided I did not want to pursue this. He knows all the numbers going into this deal. Is it possible to wholesale this to him? How would I approach it?

Feel free to correct my numbers or the deal itself if you find any errors.

[Wes S.]

Nice deal Mogi...I think depending on your goals & situation, you look at rehabing only whats necessary to get it to rental shape, and rent that baby out. Minimize the rehab expenses and try to do things yourself to save $. Or baby step your way to rehab with the excess cashflow over the course of a year if the condition is workable for a tenant. Your return will be better and this is a long term ROI no brainer.

OR

Rehab it to Sell it and then invest those gains into other bigger properties or a multifamily rental.

Wholesaling it is not a good route in my eyes if you have the opportunities on the table like you mentioned. You're in a great position all because you bought with the margin of safety off the get go.