All Forum Posts by: Marcus Wallace

 Yep. That is what I figured. Thanks for clarifying

@Marcus Wallace sure the more turnkey the better for me. It just comes down to time. Im a broker in SA so please don't send me anything in the MLS, but if you know of something not let listed let me know.

BTW, for reference. I just purchased a house in SA last month. I paid 80k, put 7k into paint and floors. It appraised before closing for 95k. So I had about 75% ROI when I closed. Paint and Floors probably only gain me 5k in "value" so my ROI went down a little bit. My payment is $517/month. I have tenant moving in next week at $1100. I expect after expenses this one will be about 450-500/month is CF. Not a bad day at the office.

@Marcus Wallace, they say real estate is local, they also say all investors are different. So whether is it a good deal or not really depend on where you are and what you want.

It's probably a good deal if all other houses that demand a $1,400 monthly rent are selling for 160k or higher. You said the FMV is about 160k so 20% discount is a pretty good deal and there are several ways you can make money out of it. You can either buy and hold or just flip it and make a few thousands.

It should be fairly easily to figure out your returns with different exist strategies. Then you can tell if it is a good deal for you or not. For me, I will jump to it all day long.

@Marcus Wallace

Based off what info you provided...

$130k is roughly 80% of FMV ($160k) which is a decent discount, not the greatest.

Market Rent is slightly over the 1% rule (1.07%), not much over...  Most people like to see 2% but not possible in all markets.

Based off of the $1400/mo rent, using the 50% rule $700 would go out in expenses such as taxes, insurance, vacancy, maintenance and repairs leaving the remainder for debt service and profit.

That would mean $8400 NOI Est. putting your CAP rate at 6.4%. Is that good or bad? dunno what your market dictates or the neighborhood the property is in.

Now for the financing...

130k Purchase Price

20% Down = $26000

Rate 5%

Term 30 yr fixed

PMT = $558

NOI(Monthly) - Debt Service = $142 Cashflow ($1704 Annually)

CoC = $1704 / $26000 = 6.5%

If you would invest $26,000 to buy 56k in equity and  increase your income by $142/month and also grow your net worth a few thousand a year thereafter...  then I'd say its definitely worth looking into.  That would all depend on your goals...  If that meets your baseline for a deal or not is up to you.

There are some people who would consider nothing less than $200 per door...  If that's your requirement then keep on walking or keep working on price or terms.

Either way you have some numbers to play with.

Jeff V