First Deal analysis

[Daniel DiCosimo]

Hello BP community.

I am new to the forums and working on my first deal and would appreciate some feedback on my first deal analysis. Here is the summary:

- 2/1/1/1 4 plex

- Last sold in 2016 for 46,000

- Owner has put in $8332 for rehab since

- list price : 79,900

- last years rent total: $21,446

- last years expenses: $10,912 (this is not counting Safe Harbor expenses, I included those in rehab)

The place is by no means sparkling, some of the units have section 8 tenants, and it’s in a small town with population of around 1300. But is 17 miles from a town of 27,000.

I've run the numbers on my own and cash flow was close to the actuals ($6997 cash flow before taxes, 29.4% cash on cash ROI, cap rate of 13.88%).

My main concern is that I am paying over market value. It is being sold privately by the owner, who came up with the price based on its cash flow. I take zestimates with a grain of salt but it is currently around $56,000. Which somewhat aligns with the 46,000 + rehabs the current owner has done.

Please let me know your thoughts!

Dan