What would you offer for this property?

Question

Hey guys,
Please help me evaluate this property. What would you offer for this property?

Location: Kansas City, MO
Asking Price: 70K
Repairs: 25-27K
Cash In: 95-97K
Electrical, plumbing, framing, plans done. Needs everything else.

4 Plex, All 1BD units, All individually metered
Market Rents - 585 - 600
Property Taxes: approx 800 (will have to confirm, online tax system down)

Multi-units in the area are selling at 12-14 cap, which gives me about 100-117K as mkt value

Based on 2% rule, I'm getting 117K mkt.

Whadya think? Your help is great appreciated!!  :D

Lauren Norwood · Answer

@Brian. Most of the drywall is done. I would say about 65-70%.

@John. Thanks for your input! The area is actually pretty desirable so it's definitely a great opportunity. It was just a rehabber that ran out of funds so the property has been sitting for about 2 years now. I was thinking about coming in at 52K, top price being about 59K plus my 5K fee. Glad to see I am close! Thanks!

Jon Klaus · Answer

I'd start at $51k to $55k.

Jon Klaus · Answer

This would be a deal in my area (DFW) if it was located in a decent (safe) neighborhood.

Brian Levredge · Answer

Is this thing gutted to the studs and joists?  If it is your rehab budget is going to be well over 27k.

Lauren Norwood · Answer

Hi Jimmy! I am planning on wholesaling it. I understand that the spread needs to be there. I was hoping to get opinions on what I should offer. Or on the inverse, what would you pay if you were going to buy, close, and rehab?

I am definitely not looking to pay his asking price. Personally, I think it's a little high.

Thanks,
Lauren

Jimmy C. · Answer

Are you planning to wholesale it?  Or are you going to close and do the rehab?

Since this is in the wholesaling section, I assume you are wholesaling. My thoughts are that your offer needs to be significantly lower than ask price.  That is in order to create your spread and still keep the deal attractive to the end buyer.