19d ago in 🎩 Deal Boss Talk
7 Parts of a Entry Fee
STEP 1:
Purchase Price?
Bed Bath Count?
Address?
ARV?
PITI: $740. VS. Rent Rate: $1,100 ($100-$200 with Wrap or Lease Option)
$360 GROSS PROFIT
Does it cashflow or not?
YES. - Go to step 2.
NO. - Renegotiate/Loan Mod or you assign to a non caring party. (Homeowner that will live in the property)
Group home buyer.
AirBnb buyer.
Ask yourself… is the entry fee a deal killer?
STEP 2:
ENTRY FEE:
7 parts to an entry fee
- Cash to the seller. $1,000
- Arrears/late payments/liens: $23,000
- Cost of acquisition: $4,000
- Closing costs: $2,000
- Renovation costs: $1,000
- Maintaining the property: $2,000
- Marketing Costs: $500
Total ENTRY FEE: $33,500 (possible to renegotiate?)
No…. Cannot renegotiate.
OR
Raise private capital (10 exits) YOU ARE THE OWNER
10%
$33,500 X .10 = $3,350
$3,350/12 payments = $280
STEP 3:
Exit Strategy:
- Wholesale it. Buy and hold investor or Homestead buyer.
- Novate it. List on MLS
- Wrap (0-5%)
- Lease option (10% Vacancy Repairs)
- SRRR (Subto, Rehab, Rent, Repeat)
- BRRR (Buy, Rehab, Rent, Repeat)
- Subtail
- Vacation Rental
- Group Homes/Assisted Living.
- Corporate Rental
3
5 comments
7 Parts of a Entry Fee
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