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OFF MARKET buy with inspection already finished [code 813]

Posted by Powered by Simply Do It on February 15, 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.  

  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 tenant was out and home cleaned up.  Recent comparable on the same street 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 $230,000
Suggested offer (low) $230,000
Suggested offer (high) $230,000
Asking $230,000
Market Value (after improvements) $250,000
Improvements (lower) $3,500
Improvements (upper) $9,000
Closing Costs $2,300
Mortgage Costs $2,300
Other Fees At Closing $0
Total Cost  $240,850

Financing Assumptions  
 Down Payment (%) 25%
 Down Payment Amount $57,500
 Financed Amount $172,500
 Interest Rate 3.875%
 Mortgage Term (Years) 30
 Monthly Mortgage Payment $811
 Cash Outlay (Total Out of Pocket) $68,350

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 $100 $1,200
 Repairs $100 $1,200
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 $594 $7,133
 Total Expenses (Fixed + Mortgage) $1,406 $16,867

Financial Analysis / Deal Attractiveness        
Years: 5 10 15 20
 Cap Rate 4.6% 5.6% 6.6% 7.7%
 Net Cash Flow $15,688 $38,075 $67,857 $105,805
 Equity Increase $70,958 $157,236 $262,140 $389,691
 Total Gain $86,647 $195,311 $329,997 $495,496
           
 Average Cash Flow/Year $3,138 $3,808 $4,524 $5,290
 Average Cash Flow/Month $261 $317 $377 $441
 Average Gain/Year $17,329 $19,531 $22,000 $24,775
 Average ROI 126.8% 285.8% 482.8% 724.9%
 Annual ROI 25.4% 28.6% 32.2% 36.2%
 Projected Property Value $304,163 $370,061 $450,236 $547,781

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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