Basics of the deal:Asking $750,000 with seller to owner finance with $25,000 depositGross income - $111,000Taxes - will be 3.7% of actual sales priceInsurance - $7,000Utilities are $7500 Assuming 5% vacancy rate and 10% repairs (property has had recent maintenance work and new roof and parking lot and nothing that appears imminent)Assuming 7% property management (which is average for our area) although we will self-manage at first although I know that we need to consider it in our analysisThe numbers don't work at their asking price.We'd like to offer $625,000 at 6.5% interest for 30 years, balloon after 20 yearsThe cash on cash return without the property management is 27% but with the property management, there is potential for negative cash flow in years with high vacancy and repairs.

Currently we are in the framing stage, roof is going on today.Our plan is to focus on BRRRR, followed by Fix and Flip.

Well problem is they put on a new roof on and day before closing its leaking.  

Here are the numbers: Asking price - $630,000 Down payment $126,000 Monthly Rent - $7,585 ($91,020 annualized)Expenses - $1,825 monthly ($21,891 annualized)NOI - $69,130 Annually10% Vacancy - $9,102Debt Service $3,000 monthly ($36,000 annualized)Cash Flow - $2,002 monthly ($24,027 annualized)Cash on Cash return - %19Cap Rate - 9.5% after vacancy deducted from NOIAverage rent $506 over all unitsThe property has new vinyl siding, new windows, and new roofs in the last 5 years.

Spreadsheets and websites are great for starting out but you will need to be able to look and say that roof needs replacing so for an 1800 sq. ft. house it’s in the 4 to 5K range.I can go on with other tidbits but that will get you started.

Nobody wants to sell their note at a steep discount, but when you need cash you need cash, and there are ways to make getting some cash out more palatable for them. 

It is about 2 1/2 hours from Manchester, nh.We made it through inspection, it is a 100 year old house and needs a roof before the winter, I am figuring it should be about 15kish, but haven't gotten quotes.Putting 3.5% down with an FHA loan the p&i +mortgage insurance are $1200 a month taxes and insurance put it at about $1700, then $400 for maintenance/capex, and $100 for water/sewer and house electric, 8% $244 for vacancy.Current income is $3050/month, after calculating for maintenance, vacancy, capex I figure we should cash flow around $600/month.

I drove by the property, it's on a busy street, it has no garage, but the roof looks good and the siding looks good.What do I do? 

@Sundiata JacksonYou are going to need to save at least $1800 ($150/mont) a year just to deal with the eventual roof replacement, water heater repairs and furnace maintenance.  

A typical basic new build home is around $110/s.f and you are not building a roof or foundations, so you should be in range, depending on the specifics of your home.One question is if your existing heating and cooling systems are capable of handling the increase load, or if you need to do a dedicated unit in the attic for this room.