1ST Deal?
OK. I may not have all info I need , if not I hope someone can advise me.
small house 1200 Sq'
3-4 BR
1BA
Appraise at $80,500
Seller previously rented for $575 with ease. Needs about $3000 cosmetically. 6 acres. Asking $78,000.(too high in my opinion but I know that buy price is not of utmost importance when buying rental properties) or so I am told. Can someone direct me to a ROI calculation formula for figuring out what type of offer I should make? Help? Thank you.
Just outta curiousity, what did you mean when you said that buy price is not of utmost importance? What is MORE important than that?
Based on the book, "weekend millionaire's secrets to investing in RE" they show several situations where you can actually pay MORE than a sellers asking price and the numbers still work out where it is a good investment. They concentrate mostly on terms instead of price. I guess its more of a leverage position?
A good rule of thumb is that you need to get 1% of the total purchase price + repairs in rent to cover your expenses and turn a profit.
In this case, if you buy at $78,000 you need to collect $780 in rent every month.
This NOT a good deal unless that 6 acres if of importance other than rental.
I applaud your effort. I do recommend you buying a course or such to get the basic info---or read the articles and posts on here for free!
GOOD LUCK