Wholesale Rental Property

[Robert Tuchinsky]

Hello BP, 

Long time lurker, first time poster here. I am relatively new to REI and was hoping to get a little advice. Although I am mainly trying to wholesale to rehab buyers, I have been getting a lot of responses from what we can call "disgruntled landlords" who are motivated to sell. I see an opportunity in this as my area has many rentals. Also, the low market prices here in Jacksonville open up opportunities for more cash buyers as you can easily snag a property here for under 100k.

Here's an example I am currently working on: I have a landlord that wants to sell all 3 of his properties due to recent medical problems, debt and other factors. The 3 properties are all within a mile of each other with "as is" values ranging from 90-100k. They are also all currently tenanted with long term renters who have been renewing their yearly lease for a few years now. The only repairs needed are the cosmetic ones you would expect from most rentals. The houses are also all close to a large military base which helps brings renters in. The rents range from 875-950 per house. The landlord is asking for 220k for all 3; which is a little high. I think that if I can get them to come down to the 180-190 range, I can make some money here. My exit strategy would be to assign/double close the properties to cash landlord buyers. I think I can sell each one for around 70-75k which would leave some room for instant equity for my buyers with a calculated CAP rate near 10%. Need your help, y'all. I'm curious if I am on to something or not here.

Thanks and Happy Investing!

Robert