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OFF MARKET buy with inspection already finished [code 813]

Posted by Powered by Simply Do It on February 28, 2022
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FULL DISCLOSURE – SDI's local team (PM & agent)  both have a minority interest in this property with an investment group.  This investment group is wanting to reallocate funds into a multifamily opportunity. 


UPDATE:

The inspection report revealed there are multiple minor items that need to be addressed but nothing major.


Market value is ~$250k

Asking is $230k

We believe the seller will accept $220k based on the known items that came in the inspection report.


  1.  Long term tenant.  They have been renting since 2015 and just signed a 2 -year lease for $1500/mo.
  2. New owner will not have to pay lease up fees, renewal fees, vacancy loss, turn costs, rehab costs, holding costs, etc. for at least 2 years along with immediate revenue.  Should help with ROI quite considerably.
  3. This home is located in an old alabaster neighborhood that should continue to appreciate and rents should continue to increase.
  4. The home could be listed around $250k on high end currently if the tenant was out and home cleaned up.  Recently comparable on the same street just sold for $267k.  So I think at the $230k there should be some immediate equity gained by whomever.
  5. We have already completed a full inspection on this property.  No surprises here!
What's next?
Email/text us or the local team (bir1@simplydoit.net) back for address, analysis and to get connected to Simply Do It's local team that handles this transaction.
Metro: Birmingham – bir1@simplydoit.net
Code: 813
Property Specifications 1
 Bedrooms 3
 Bathrooms 2
 Square Feet 1626
 Year Built 1976
 Garage Size 2
 Schools Rating (on scale of A-F) B
Purchase Assumptions My Offer
Offer used for analysis $220,000
Suggested offer (low) $220,000
Suggested offer (high) $230,000
Asking $230,000
Market Value (after improvements) $250,000
Improvements (lower) $3,500
Improvements (upper) $8,500
Closing Costs $2,200
Mortgage Costs $2,200
Other Fees At Closing $0
Total Cost  $230,400

Financing Assumptions  
 Down Payment (%) 25%
 Down Payment Amount $55,000
 Financed Amount $165,000
 Interest Rate 4.00%
 Mortgage Term (Years) 30
 Monthly Mortgage Payment $788
 Cash Outlay (Total Out of Pocket) $65,400
Financial Assumptions Monthly Yearly
Rent (upper) $1,625 $1,750 $21,000
Rent (lower) $1,500 $18,000
 Property Tax Rate (Approx.) 1.0%  
 Property Taxes $164 $1,968
 Insurance $95 $1,140
 Repairs $85 $1,020
Variable-Cost PM 8.0%  
Property Management Fee $130 $1,560
 Leasing Fee 60% $40.6 $488
 HOA $0 $0
 Vacancy Rate 4.0%  
 Total Fixed Expenses $574 $6,893
 Total Expenses (Fixed + Mortgage) $1,362 $16,346
Financial Analysis / Deal Attractiveness
Years: 5 10
 Cap Rate 5.6% 6.7%
 Net Cash Flow $18,343 $43,514
 Equity Increase $69,925 $155,068
 Total Gain $88,268 $198,582
     
 Average Cash Flow/Year $3,669 $4,351
 Average Cash Flow/Month $306 $363
 Average Gain/Year $17,654 $19,858
 Average ROI 135.0% 303.6%
 Annual ROI 27.0% 30.4%
 Projected Property Value $304,163 $370,061
Property Ratings Suggestions
 Item      Suggested Criteria (Min.) This Property FAVORABLE /
INSUFFICIENT
 Schools     B B FAVORABLE
 Square Feet   1000 1,626 FAVORABLE
 Bedrooms   3 3 FAVORABLE
 Bathrooms   2 2 FAVORABLE
 Year Built   1970 1976 FAVORABLE
 Rent/Price (%)   0.75% 0.76% FAVORABLE
 Average Cash Flow (at year 5) $125 $261 FAVORABLE
 Average ROI (at year 5) 15% 25.4% FAVORABLE
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Disclaimer

Information contained herein was obtained from sources deemed reliable, however, Simply Do It and/or the owner(s) of the property make no guarantees, warranties or representation as to the completeness or accuracy thereof. The presentation of the property is offered subject to errors, omissions, changes in price and/or terms, prior sale or lease or removal from the market for any reason without notice.

The analysis is provided “As Is”. All the information is believed to be accurate (except for the small effects of some simplifying assumptions), but is not guaranteed, and depends on the values entered for the property. This analysis is intended for the purpose of illustrative projections. The information provided is not intended to replace or substitute for any legal, accounting, investment, real estate, tax, or other professional advice, consultation, or service. Simply Do It and/or the owner(s) are not responsible nor liable for any damages arising from the use of the analysis info. 

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