I have a deal that I am looking at. Its a duplex 4/2 1800 square feet for $42,500 and needs about $16k (this includes a 20% contingency and I had my father-in-law/contractor walk the property with me) in rehab for both sides. Has good roof and its concrete block. No renters, but a section 8 house down the street (same bedrooms/bath/square feet) rents for $650 so I would imagine I could at least get $600+/unit. It meets the 2% rule, it will meet the 50% rule and its at 55% FMV after repaired. I’m thinking about offering $35k for the building. Do you offer low on wholesale properties? What do you think of the deal? Also to do section 8 or not? I have a meeting with housing authority Friday.
Here’s how I see this deal:
Gross rents: $1,300 (section 8)
Operating expenses: $650
NOI: $650
Mortgage Payment ($58,900, 30 yr, 7%): $392
Cash Flow: $258 or $129 per unit per month
I think this is a very good deal!
Mike
Thanks Mike. I actually estimated my expenses to be higher for the first year due to LLC start up costs, buying quickbooks, etc. I put in an offer so lets keep our fingers crossed!!!
PS the book is great. I read it twice last weekend (long flight)