is this a good deal

Bird Dogs, Wholesaling
1

Just wanted to know if this would make a good wholesale deal.

6-family (6 units)

all units are 3 bedrooms/1 bath and can be rented in this area for $650 a unit. they have already been approved by section 8, and are de-leaded.

all major repairs done. needs just cosmetics. seller says would cost about $12,000 to finish, but i think it might be more like $30k to finish.

He has it listed with a realtor fo $230k but he told me he would take 200k. i would like to pick it up for about $185k. i feel it is worth about $350k (springfield, ma)

any and all advice would be appreciated. thanks

2

From your data, using a cap rate of 10%, the value is more like $250K range. $185K is not a great deal, especially after needing $30K more, but seems like it could cashflow given potential for a $2100/month rent roll.

3

thanks for your advice. :smile

4

It all depends on the terms of the deal too. For cash flow purposes, @185K this seems like a pretty good deal. if you use the old .02 formula, you are $200 ahead/ month. At 200K you are a $100 below so that 15K makes a big difference