Rehab Offer From Potential Partner
What do you guys think about the initial numbers? I am going by the property soon and having the comps run as today. Just wanted to get some feedback. The offer comes from a pretty well known REA who works with a ton of investors here in town and might possibly serve as a mentor for me. This would be my first deal. I had found another one, but walked away after hearing not-so-good things about the wholesaler. Thanks in advance.
Purchase Price: 120,000
ARV: 220,000
Repairs: 30,000
Hard $ Loan: 150,000
Closing Costs Required: ~6,500, which we'd split
Holding Costs, Monthly: 2,000, which we'd split
Figuring MAX 6 months holding costs, total out: 16,500
Sale Side, figuring a conservative $210k sales price:
210000 , which this could be higher
10500 commissions, since you're licensed we can again split the listing side of 2%
210 transfer taxes
3000 seller-paid closing costs, misc. plus buyer contrib. (est.)
Gross 196290
HML 150000
HC/CC 16500 , which this could be lower
Net 29790
Partner 1 14895
Partner 2 14895
Just to be picky
You're HC/CC would be 18500 , not 16500 since it seems like you are trying to look at a worst case scenario.
Otherwise looks good.
Roger
Check you comps really close. How many days on market is important too. We had comps of $240,00 but only got $185,000 after a year. Is market in your area strong or weak. 6 months could be a long time at $2000 per month. Do you both have the income to cover this? How accurate are the rehab costs. Usually low and several items forgotten or overlooked or assumed to work and do not. I wish I had taken my own advice as I would be $15,000 less poor
Good LUCK and Thank You
Hope this helps some
Ted Jr