All Forum Posts by: Natalie Olivo

 @Roy N. My agent mentioned that the selling price is probably $30,000 too high. He suggested we offer that and go from there.

 @Karen Campbell,

The fact that the rent is currently $1000 is per door is still a mystery and pain point on this deal for me. It doesn't seem logical to me that he should be accepting $1000 vs $1400-$1600. According to the buyer's agent (my guy), the home has also been on the market for 2 years without a single offer. If this place has the potential for such excellent cash on cash returns (potentially 24% if the rents are at market rate of 1500 per door) then what gives? According to my agent, the place is just not marketed properly and should easily fill and generate $3000 a month.

@Roy N. Thanks for your post! In terms of the unrealized potential, the owner (who always determined to be at the property when it is shown) claims that he has a special agreement with the tenants to accommodate viewings and such, so they pay low rent. It makes sense that the valuation should be based on the current rent being paid for sure. This is very useful information. The question is though, is it worth pushing the seller to deliver on his offer of market rate tenants and making an offer on the home based on the current rents? I'm just not sure if the seller's offer is realistic, or some kind of game being played :-)

My partners and I are currently looking at our first deal in the hudson valley area. The place is a two family home (3 bed room, 2 bath) currently generating $1000 per door with existing tenants. The problem is that these rents are below market value according to comps in the area. The seller believes (or claims) the place could generate $1400-1600 per door and is promising to fill the place with tenants before closing. Does any one else have experience with this kind of deal ? How do we structure this so that we guarantee what the seller is offering?

Thanks @JesseRayShort! I will take your estimates into consideration. Even with the conservative estimates, the deal is pretty good no? 

626*12=7512/55,000 = 14%

My main concerns with the property are vacancy and keeping the current tenants, who seem to not be caring for the property very well. My partners disagree on the latter currently.

Thanks @BrentP4 ! I thought it was a pretty good deal. We plan on cutting out property management costs to start and pull in someone as needed to be our "boots on the ground". The neighborhood is mostly residential but it is riverside and has a strip of restaurants and tourist attractions within walking distance of the property. However Zillow estimates that the place is worth only 215,000. We'd like to come in low and see how the owner responds. We are looking at comps of properties in area, but we don't want to go above $210K in our offer, since the place needs plenty of cosmetic work. Here is a better look at the numbers:

Cash flow:

210K purchase price with a 30/yr fixed mortgage at ~4.25.

Rent - Mortgage - Insurance - Tax - Vacancy(10%) - Maintenance(10%)

(1400*2 = 2800) - 774 - 166 - 583 - 280 - 280 = $717

Cash on Cash return (initial):

717x12 = 8604 / 55,000 (down-payment + rehab) = %15.6

Hi,

I've been following Bigger Pockets for a few months now and am analyzing a potential first deal with two trusted partners. Here are the numbers:

2 family attached, 3bd/2ba

currently generating $2000 / month to month collectively with 6 tenants total.

(Note: most are students and bachelors)

Strategy: buy and hold

$239,900 asking price (realtor and zillow says its high)

$200,000.00 sales price (the price we'd start bid with)

$179,925.00 loan amount (25% down due to legalities of FHA rules)

$820.00 approximate monthly payment with 3.7% at 30 years

$7000 taxes per year (roughly)

$2000.00 insurance per year (realtor provided estimate)

$1450 rent income for each unit (market rate based on rental comps in the area)

Is this a good deal? Thank you in advance for your help!

Thanks @Brandon Turner !

I will take your advice and set up the keywords.