Re: Need your help!!! -thanks! - Posted by Nick
Posted by Nick on July 19, 2001 at 15:27:29:
This is how I would do the numbers. As you know everyone has there own way.
Annual Income: $30,672
So now you have to get your mortgage payments to be what ever gives you the profit you want. My number would be about $500/mth profit is what I would want. So $6000 profit for the first year.
Profit: $ 6,000
Left for Mortgage: $14,472
Working backwards from here a mortgage of $145,000 at 9% for 30 years would be $1,166.70/Mth or $14,000.43 debt service for the property. As long as you can cover the debt service with the income of the property you are OK.
My offer would be $140K and I would be willing to go up to 145K. If your profit margin is different just do the same calculations with what ever you want for profit.
Remember the deal is only good if you are getting the profit that you want to make out of it.
Let’s look at the 160K offer that would be a debt service of $15,448.75 so you would make approximately $5,000 profit for the first year. Excluding any vacancies. If 5K is enough than the 160K offer is what you should do.
Of course all these calculations are for a no money down deal. If you are going to put money down the numbers change quite abit.
PS Nice talking to you again and Good Luck