Asking price is 41,000
Payoff is below asking price
Tax value is 45,000
Land and Home for sale in average condition
Lot size .70 acre
Currently rented for 525
Mort. payment is under 400
Positive Cash Flow 150
Tenants on 1-2 yr lease
I’ve not had luck with finding comps for the area. My first thought was to “sub to” this property, but I have read that NC passed a law just recently making it illegal without re license. What are my other options? Please I need some direction on what to do.
I plan to go visit property this wkend and see for myself. I do not want to get a loan for this rental property. Lease option is my next thought of action.
Any info would be of great help.
Thanks,
Newbie2
Waycraft,
If the income from the property is $525, and the mortgage payment is “under $400”…how much under $400 is it?
If it is just under $400, I think the cashflow calculation is inaccurate.
Keith
Hey,
Keith is right - likely not enough cash flow. Does mortgage include taxes and insurance? You need to figure in contingency funds, management funds and allow for vacancy. Doesn’t look like enough there to be comfortable with.
Peace,
Richard
I believe payments are $375. So that would be 150. As far as taxes and stuff I’m not quit sure if that is figured in but I will ask. Good question.
Concerning NC trying to pass the law on sub to’s, what is your take on this? Any info?
What is your advice on making this deal? What about a seller financed note and deed approach or CFD? If sub to is not available to do here in NC. I understand the due of sale clause issue.
I look forward to hearing from you soon.
Thanks
wraycraft,
If you are renting for $525 and your payment is $375, even if that includes the taxes and insurance, your cashflow is not $150…trust me on this. It is more along the lines of:
Income: $525
Outgo:
PITI $375
Maintenance 50
Management (@7%) 26.25
Vacancy (5%) 18.75
Total $470
Cashflow $55
This is realistic and actually probably somewhat conservative.
Keith