Rehab Deal Analysis
Owner is motivated to get out of landlord business.
Here are the details:
1) ARV = $175K
2) Purchase price = $135K
3) Repairs and carry costs = $10-$15K
On those numbers...seems marginal.
Now...consider these financials:
1) 1st mortgage at %75 ARV, 6.75%...no points...low closing costs
2) Lender pre-qualifes the re-fi. If you do the rehab you promise to do, the re-fi is almost automatic.
2) lender requires re-fi in 6 months
3) Seller will carryback $25K...1 yr...no interest...no payments
4) I kick in $3K at closing seller pays for the rest of my rehab and carry costs
5) I'll re-fi for $175K in 6 months and still have access to my sellers free loan for another 6 months. Heck, I can buy at least one more house with that!
What do you all think?
no good
chuck, why is it no good? Did you run the numbers?
Yeah Chuck. Why no good?
perfecto,
I am not a pro, so take my posts lightly.
I just ran the numbers for the fun of it. I see that you will have $21,250 available for rehabbing, but it will only cost you $15,000. You put up 3k at first but you just got that back plus $3,250. Very nice, imo.
I also see that for the first year your payments will be about $2475/month, and after this year you'll pay about $390/month. (Correct me if I miscalculated.)
What do you plan to do with the property once you've aquired it? Can you profitably afford the $2475/month for the first year?