MAO on this one

Bird Dogs, Wholesaling
1

I’m looking at this 2-family home with a bungalow on the property. One of the apts in the 2-family is rented for $750 a month…the other is vacant. The bungalow needs a “major overhaul”.
A realtor ran comps…said the 2-family would sell for about $160k, and with the bungalow fixed it may be $175-$200. Kind of a slow market area.
The tenant wants to stay. The second apt needs upgrading. I estimate the work needed in the 2nd apt plus roof to be about $15k. Would this deal look attractive to an investor if they could have it for $102k, including my assignment fee?
ARV: $160k
Work in 2nd apt: $15k
Price for my buyer: $102k
Equity $43k…plus the gross rent income is at least $750/month. Plus bungalow.

Thanks for any input!

2

If you are using the 70% formula, the MAO would be $97,000 based on your numbers. It would be close. The fact that you have a tenant paying $750/month helps. I defintitely think you would have investors interested, but you need to pretty comfortable with your ARV and fix value.

3

Would it be viable for an investor to purchase the property and then fix only the un-occupied apartment in the 2-family? Thus leaving the tenant in her unit with no repairs necessary? That would keep the repair costs low.
My first inclination is to include ALL repairs in both units, regardless of when they will be done. But I’m looking for someone to tell me I’m wrong and that this actually DOES look like a good deal.
Thanks,