The “agreement” he sent me is below (identifying details redacted):______________________RESIDENTIAL LEASE and OPTION TO PURCHASE AGREEMENTBUYER/TENANT: XXX Holdings, LLC Date: 2-16-2018SELLER/LANDLORD: XXXPROPERTY ADDRESS: XXXXXXRESIDENTIAL LEASE1) Rent: $2,500 per month2) Lease Term: 36 months, beginning March 16, 2018 and ending March 16, 2021.3) Maintenance: Buyer/Tenant will be responsible for maintenance and repairs ofthe property, not to exceed $500 per incident.4) Sub-Lease: Buyer/Tenant has the right to sub-lease this property with writtenconsent by the Seller / Landlord, and this shall not be unreasonably withheld.OPTION to PURCHASE1) Purchase Price: $ 345,0002) Option Period: 36 months, beginning March 16, 2018 and ending March 16,2021.3) Option Consideration: $100 - All Option Consideration will be credited in fulltoward the purchase of the property.4) Rent Credit: Buyer/Tenant will be credited $ 0 per month toward the purchase.5) Closing Costs: Purchaser will pay all allowable closing costs.6) Expiration: This offer shall expire on March 16, 2021.7) Inspection: This offer is contingent upon physical inspection of property andsubsequent completion of a more formal and signed Residential Lease with Optionto Purchase Agreement.8) Non-Exclusive – This agreement is non-exclusive and can be canceled anytimeby either party.9) Assignable – This Agreement is assignable with written consent by the Seller /Landlord, and this shall not be unreasonably withheld.X_____________________________ X ________________________________Seller/Landlord Date Buyer/Tenant Date_________________I have a few questions: Is this legit?

The return on this property look fantastic.Taking a dive in the expenses you are projecting, I think you are being very optimistic on those numbers.A 1% vacancy rate is very low and very hard to achieve.Same for your Capex and repairs expenses.It is best to be more conservative.

Repairs vs.

Expenses are 1800 (water, prop management, vacancies, & repairs).

Inform your tenant that they will be responsible for all repair costs and advise them to contact their insurance agent immediately.

I have: The ability to borrow money (I have a good full time job), I have access to systems to evaluate properties and their ARV, repair costs, etc.

I have: The ability to borrow money (I have a good full time job), I have access to systems to evaluate properties and their ARV, repair costs, etc.

I have: The ability to borrow money (I have a good full time job), I have access to systems to evaluate properties and their ARV, repair costs, etc.

Here are the #s from the BP property estimator.Purchase Closing Costs$3,500.00Estimated Repairs$0.00Total Project Cost$248,500.00After Repair Value$245,000.00Down Payment$8,575.00Loan Amount$236,425.00Loan Points$4,728.50Amortized Over30 yearsLoan Interest Rate4.375%Monthly P&I$1,180.44Total Cash Needed$16,803.50 $2,900.00 MONTHLY INCOME$2,468.77 MONTHLY EXPENSES$431.23 MONTHLY CASHFLOW7.89% PRO FORMA CAP$19,340.00 NOI$16,803.50 TOTAL CASH NEEDED30.80% CASH ON CASH ROI7.89% PURCHASE CAP RATEI assumed I'll do an FHA loan at 3.5% (or maybe 5%) and would pay closing costs out of pocket.

I just got the inspection report for the house and it says that the roof needs to replaced or repaired (see attached pic).