First Offer Accepted! Let the work begin

[Sam H.]

I have had my first offer accepted, The property was listed for 175k and our agreed offer price is 135k. Thats 13,500 a unit! The property is lower-income, I am willing to endure the process of transitioning the type of tenant my building attracts and this neighborhood is already in transition to re-building. Youth center being built less than a block away, and the city has passed plans to repair the surrounding area. Now to see how accurate the numbers really are, according to very conservative estimates, this seems like beyond an amazing deal, and honestly I thought my original offer would be disregarded due to the fact it was almost 50k under asking price. Don't be afraid to offer what YOU need to buy it for to make the numbers work for YOU! Here is what I came up with (conservative estimates)

EXPENSES AMOUNT

GAS $3,240
WATER $3,120
TAXES $3,810
INSURANCE $2,235
TRASH $600
MOWING $250
UNIT PREP $2,500
MAINTENANCE $1,200
TOTAL: $16,955

DEBT SERVICES
$135,000 12% INTEREST
$16,200/YR
$1350/MONTH

YEARLY MONTHLY
DEBT SERVICE 16,200 $1,350
OPERATING EXPENSES16,955 $1,416
TOTAL: 33,155 $2,766
1.11 DCR

OPERATING INCOME AMOUNT

GROSS RENTAL INCOME $58,200
(12% VACANCY) $51,216
OTHER INCOME $0
TOTAL: $51,216

NOI YEARLY MONTHLY
$34,261 $2,855
Cash Flow $18,062 $1,505

RETURN ON INVESTMENT
$33,500 INVESTMENT
$34,261 NET OPERATING INCOME
ROI: 102% ??? figures from NOI? Not cash flow right??

CASH ON CASH RETURN
$33,500 INVESTMENT
$18061 CASH FLOW
CASH ON CASH 54%