Potential Deal Scenario

[Juan Carlos]

BP Community,

I am looking for your input on a potential deal. I am interest in buying a single family home to Fix & Flip or BRRRR. I will House Hack while rehab is taking place with a roommate to help out with the Holding Cost. The information below was provided by a Loan Officer for my Closing Cost as the Buyer/Borrower and Title Company for the Seller's Closing Cost.

Loan Information

$185,000 = Loan Amount

$9,250 = Conventional Loan Down Payment (5%)

$4,980 = Estimated Closing Cost: (Processing Fees, Underwriting Fees, Appraisal, Appraisal Review Fee, Title Insurance Services, Settlement Fee, Administrative Fee, Courier Fee, Owner's Title Insurance, Lender's Title Insurance, Recording Fees, City/County/Stamps, & State Tax/Stamps)

$2,120 = Estimated Prepaid/ Estimated Reserve Cost: (Daily Interest, Home Insurance, & Property Taxes)

$16,350 = Total Cash at Closing from Borrower

$1,000 = Estimated Monthly Mortgage Payment: (P&I, Hazard & Mortgage Insurance, & Real Estate Taxes)

Seller Closing Cost

$0 = Agents Commissions: (No REA involved in this transaction per Seller's request)

$900 = Total Cash at Closing from Seller: (Estimated Doc. Prep., Release Tracking, Title/ESCROW Service & Doc. Prep., Wire Fee, Grantor's Tax)

Fix & Flip Cost (Using BP Fix & Flip Calculator)

$177,900 = Max. Offer Allowed (Estimated ARV = $260,000)

$185,000 = Purchase Costs: (Purchase Closing Costs = Offer, Estimated Closing Cost, & Estimated Prepaid/ Estimated Reserve Cost)

$45,000 = Estimated Rehab Costs: (Repair Cost & Holding Cost for 6 month)

$12,000 = Sales Costs: (REA Commission & Sale Closing Costs)

Potential Offers

1) Since no REA are in this deal, settle with Seller for $185,000 and Seller will pay for all closing costs ($8,000 = Buyer's & Seller's). 

2) If Seller does not want to pay for Buyer closing cost, then offer $177,900 to account for $7,100 of Buyer's Closing Costs.

3) Any other?

This property will be the first so I am not trying to hit a Home Run deal right off the bat. Open to any suggestions.

Thanks,

The Brothers