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Going after first deal

Posted on: Fri, 10/19/2012 - 23:41
Going after first deal

Hey everyone,

I'm on the path to doing my first deal and I need a little help figuring out how much to offer for the property. Here is the breakdown of everything.

- Duplex
- 3/2 and 1/1 2770sf total
- Already rented
- Recently lightly renovated (paint, refinished
hardwood, cleaned
- $2200 monthly income
- Avg $500 in utilities
- Clean Title
- Asking $114,000
- No owner financing
- FMV ranges from $120k from zillow to $154k from
totalview real estate

I'm planning to do a simple assignment on this one.

Most of the investors on my buyers list are looking for a 15-16% cap rate. I have contacted them to verify how they calculate their cap rate to make sure I buy the property correctly. Is there anything I am missing or forgetting?

Thanks
{J}

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Posted on: Sat, 10/20/2012 - 00:24 #1
Nice!

Don't forget annual taxes, expenses (utilities), property management fee, etc. Take the Annual GRI (Gross Operating Income), minus expenses to get the NOI (Net Operating Income). Divide it by the asking price or purchase price, and that's your cap rate. It would be helpful to know COC (Cash on Cash) return, ROI, etc. SO, what does it cap at now?

JDubb340 wrote:
Hey everyone,

I'm on the path to doing my first deal and I need a little help figuring out how much to offer for the property. Here is the breakdown of everything.

- Duplex
- 3/2 and 1/1 2770sf total
- Already rented
- Recently lightly renovated (paint, refinished
hardwood, cleaned
- $2200 monthly income
- Avg $500 in utilities
- Clean Title
- Asking $114,000
- No owner financing
- FMV ranges from $120k from zillow to $154k from
totalview real estate

I'm planning to do a simple assignment on this one.

Most of the investors on my buyers list are looking for a 15-16% cap rate. I have contacted them to verify how they calculate their cap rate to make sure I buy the property correctly. Is there anything I am missing or forgetting?

Thanks
{J}


Posted on: Sat, 10/20/2012 - 01:05 #2
thanks

How do you calculate the COC return? I am now waiting for the sellers financials to verify how much he pays a month. I may call the utilities company myself to see of they can give me an average. I don't know what the current cap is. How do I find that out?

Thanks
{J}