1. Deal Summary Property Type: Single-Family Home Location: Nashville Purchase Price: $180,000 Estimated Repairs: $35,000 After Repair Value (ARV): $275,000 Total Project Cost (Before Holding/Selling Costs): Purchase Price: $180,000 Repairs: $35,000 Subtotal: $215,000 Typical Additional Costs (Estimated): Closing Costs (Purchase): ~$3,000 Holding Costs (Taxes, Insurance, Utilities, Interest): ~$7,000 Selling Costs (Agent Fees ~6% of ARV): ~$16,500 Total Estimated Investment: $215,000 + $26,500 = $241,500 This appears to be a mid-range rehab opportunity with a moderate margin depending on actual repair accuracy and resale timeline. 2. Estimated Profit Analysis ARV: $275,000 Total Estimated Investment: $241,500 Estimated Gross Profit: $275,000 − $241,500 = $33,500 Estimated Net Profit Margin: $33,500 ÷ $275,000 = 12.2% Investor Rule Check (70% Rule): Maximum Allowable Offer (MAO): (ARV × 70%) − Repairs = ($275,000 × 0.70) − $35,000 = $192,500 − $35,000 = $157,500 Current asking price of $180,000 exceeds the ideal MAO by approximately $22,500. 3. Suggested Offer Range Primary Target Offer (Ideal): $150,000 – $157,500 Maximum Stretch Offer (If Market is Strong): $160,000 – $165,000 Not Recommended Above: $165,000 unless: Repairs are overestimated ARV proves higher Holding time is short Market demand is strong 4. Investment Risk Assessment Market Risk: Medium Nashville continues to show steady population growth and housing demand, but price sensitivity at mid-tier homes requires accurate pricing. Renovation Risk: Medium $35,000 suggests moderate rehab. Hidden issues (roof, foundation, plumbing, electrical) could increase costs. Margin Risk: Medium–High Current numbers show limited margin at full asking price. Profit buffer is tight if resale price or costs shift. Liquidity Risk: Low–Medium Single-family homes typically resell quickly if priced correctly, especially in growing metro areas. Financing Risk: Medium Holding costs and interest can quickly reduce profit if project exceeds timeline. 5. Investment Potential Rating Overall Investment Score: 7 / 10 ⭐ Strengths: ✔ Solid ARV spread ✔ Reasonable rehab budget ✔ Strong housing demand market ✔ Potential for multiple exit strategies Weaknesses: ⚠ Asking price higher than ideal investor entry point ⚠ Profit margin not extremely wide ⚠ Sensitive to rehab overruns This deal becomes significantly stronger if acquired below $160,000. 6. Exit Strategy Suggestions Primary Strategy: Fix and Flip 🏡 Best suited if: Rehab stays near $35,000 Home can sell near $275,000 Timeline remains under 4–6 months Estimated Flip Profit: ~$25,000–$35,000 Secondary Strategy: Buy and Hold Rental 💰 If converted into a rental: Estimated Rent (Typical for ARV Range): $1,900 – $2,200/month Estimated Mortgage + Expenses: $1,500 – $1,800/month Potential Cash Flow: $100 – $400/month Long-Term Benefits: ✔ Appreciation ✔ Rent growth ✔ Equity buildup Alternative Strategy: Wholesale Assignment 📄 If under contract below: $155,000–$160,000 You could potentially assign the contract to another investor for: $5,000 – $15,000 assignment fee Backup Strategy: BRRRR (Buy, Rehab, Rent, Refinance, Repeat) 🔁 Best suited if: Refinance value supports ARV Rental market demand is strong Cash-out refinance returns initial capital Potential to recover majority of invested funds if refinanced near $275,000 ARV.