I am working on a deal that has 4 buildings with 3 units each total cost is $500,000.00 each unit rents for 500 I can get a 100% financing for 8.75% interest here is the rest that I have so far does this sound like a good deal thanks for any input
water 2880
insurance 1600
re taxes 8092
repair / maintance 5291
The payment will be $3950 per month at 8.75% 30 years and figuring 90% collections you will collect $5400. Leaving you $1450 for all the other expenses. Can you spell alligator.
When you do small residential you need the rent to be twice the mortgage payment to have even a fighting chance of making any money. I knew without doing any spreadsheet that this was not a good deal. I buy duplexes even with the same numbers. $40K purchase price and $800 total rent per duplex. I can do even a little bit better but they require rehab. The problem is getting small loans under $50K.
When you are looking for loans less than $50K work with local banks. You have a couple of options. You can put helocs on all of your investment properties and use that cash or if you have equity in your primary residence the bank will lend 100% using what they call “an accomidating lien”.