Is This Deal Good Enough To Wholesale?
I have an owner who has two houses. She has put in an offer which has been accepted on another house.
Closing April 28th !!!!!
The two houses are worth $720k from comps.
I think I can get them under contract for 600k or slightly above....they need cleaning and paint say $10k
My q is if I can get them under contract ....is this enough of a deal to wholesale to someone for say 10k .
Be gentle I am learning
JK
You will want to analyze the 4 benefits to investing, not just Cash Flow. The four benefits are CFBT, Pricipal reduction, Tax savings and Appreciation.
To answer your question: CFBT-cash flow before taxes is calculated this way:
Gross Operating Income(Annual Rent-Vacancy=GOI)
minus operating expenses (tyipically operating expenses are 20% of your gross operating income for single family) minus your annual debt service equals your CFBT
Summary:
Gross Operating Income
Minus: Operating expenses
Equals: NOI
Minus: Annual Debt Service
Equals: CFBT
Thanks Ray,
I appreciate the help.
By the way, I’m a FL boy too. Born and raised in St Pete. Just doing my time, serving my country up here in Alaska. I miss the sunshine… Hope to get back down there someday and really get into investing.
My wife and I are trying to get it rolling here and when I retire in a couple years, we’ll move our operation back home.
Again, thanks for the help.
-Jeff