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MKHG Real Estate
Investment Group LLC

 

 

 

Case 1: A Good deal

This is taken from Ebay listing #4306066297.  This is a two unit house in Buffalo New York currently listed at around $8,000.  At the low end, both units rent for a combined $850 per month.  Taxes are around $500 a year.   The listing also mentions that the house is in need of around $6,000 dollars worth of repairs.

Lets see if the Real Estate Offer Generator can determine whether or not this is a good deal.

The first step is to determine what our Net Operating Income is by taking into account the rent, all the expenses including management, maintenance, and vacancy reserve as well as a return on our down payment and any required repairs.  The Net Operating Income is computed in the
Net Operating Income screen.


 

After the NOI has been computed and adjusted for the return on the down
payment and repairs the next step is to see how much can be offered for
this property so that we can still get our desired return and meet all
expenses.  This calculation is done in the
Offer Generator screen.
 

As you can see, a good price for this property would be $29,273.05 financing at 8% for only 5 years.  If the property were to go for only $9,000 then this would be a tremendous buy.  In fact, you can purchase this
property and make a whopping 50% return on your down payment and repairs and still pay off the house in 5 years.  Here is what the cash flow would look like for the next 10 years as computed on the
Cash Flow
screen.

 

More Case Studies

 
bulletCase 2 - A bad deal
bulletCase 3 - A creative deal

 

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