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Author Topic: 9-plex deal. Need help!  (Read 2226 times)

Offline carlosguti

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9-plex deal. Need help!
« on: October 04, 2005, 10:52:49 pm »
Here is the deal:

9-plex
$36,288 rent roll annually
$12,480 expenses
4% vacancy

Price $160,000
$128,000 1st bank finance 9%.
$32,000 owner carry-back 8% or lower.
$0 down deal.

1 unit is completly destroyed due to termites. ground needs to be redone. Owner is willing to assist in getting that fixed.

I ran the numbers: $4,849 annual cash-flow with this.
Is there any warning or anything im missing before I drive 7 hours to look at it?
Also are there city programs that might help with the termite damage?


Offline 4EEM

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Re:9-plex deal. Need help!
« Reply #1 on: October 05, 2005, 08:14:59 am »
Unless the termite problem is cured before purchase I don't see a lender giving you a loan especially if you've got no cash in the deal.
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline milo0129

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Re:9-plex deal. Need help!
« Reply #2 on: October 05, 2005, 11:27:38 am »
Patrick is right, the building has to pass a home and obviously pest inspection before a bank will even consider lending...Especially since the termite problem is already an issue.
Laura
Sr. Loan Officer
MPI, Inc.
617-388-4116

Offline carlosguti

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Re:9-plex deal. Need help!
« Reply #3 on: October 05, 2005, 02:20:17 pm »
Alright, I will look into it further.

Offline cecsix

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    • I buy houses in Ohio....Fast!
Re:9-plex deal. Need help!
« Reply #4 on: October 05, 2005, 02:24:46 pm »
in addition to what the others said, if a multifamily property has termites, how can you be sure it is confined to just one of the units?  unless i am totally wrong about termites, they probably are spread throughout the property, or will be if not eradicated quickly.  
Bite off more than you can chew, then chew it!
www.ohioquickoffers.net

Offline 4EEM

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Re:9-plex deal. Need help!
« Reply #5 on: October 05, 2005, 05:30:14 pm »
There is a program called Loansizer you can download a demo version at http://www.lendingapps.com/brokerpro.htm

Get your hands on a commercial rate sheet. And a property analysis spreadsheet.

Sit down and start plugging in numbers.

I would set the DSCR guideline to 1.4.

I would stay away from properties that would "be great if...", unless you've got $$$.  I think paying all cash for properties gives investors a little clarity.  Using the loansizer program you will essentially be looking at the same data sets that lenders use.  If a lender will not loan on a property then why would you as an investor want to buy it?

Just my $0.02

If you would like any analysis programs drop me line.



Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

 




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