Please - Newbie Needs Help/Opinions to make a deal

Ok, Folks, this might be kinda long, but I’ll be as brief as possible. My plan is to pay off my bills - meaning, I’m credit card debt free in March 2006 - by paying off 1 bill a month at approximately $1000 - $1300 a month

As I’m reading and researching about REI, I’ve come across some great properties. I’ve only been researching about 2 weeks, so I don’t know whether it’s newbie excitement or what. However, I keep telling myself to slow down, and when I’m ready next spring, there will (hopefully) still be some good deals out there.

Which brings me to my post:

There are 2 multi family properties that I’ve identified as good buys.

The first is $165k list, with $12,000 NOI, vacancy factor 50.

The second is 195k list, with $14,200 NOI, vacancy factor 0.

While my preference is to wait until March, it seems like I’m missing 2 great opportunities. I have not idea how I can get either of these properites.

I know that the data still needs to be verified. In fact, I’ll deduct $2400 off the NOI for the sake of fact finding, and newbie miscalculations, which still leaves $9,600 NOI, and $11,800 respectively.

I know the NOI will be lower because I don’t have a 20% down payment.

Obviously, the property with the 0 vacancy factor is better, but the list price - althought I realize i can offer less - is still over what I can comfortably swing on a monthly basis if someone flakes on the rent.

How can I do this deal no money down? And will doing so going to make my margin a lot more narrow?

When I figure out a strategy to buy the property, what strategies can I use to increase my cash flow/reduce the mortgage, thereby increasing my cash flow?

P.S. I can come with some modest earnest money, and cash to pay an appraiser, and have an inspection, pay for an insurance policy.

It’s the big cash thats an issue.

Please advise.

By my calculations, (based on 100% financing, 30 yr term, 7.5% interest), both of these properties are cash flow negative - meaning that you’ll be losing money each and every month! That doesn’t sound like a “deal” to me!!!


I get that. I was asking how/whether I could do any creative financing to get it to be positive.

I have a comment about going debt free. You may want to get more information on that. You can end up with rich man’s syndrome. I was trying to maximize my credit score for a deal I was doing and that is what my CPA said I had. The rich man’s syndromeGHt is a case when you start paying cash for everything (like a rich man) and then you end up with not ENOUGH credit which causes your credit score to go down. Keeping your balances to 30% or lower of your total balance gets you maximum credit score and you get to keep and use the cash that would normally go to the credit card companies. I had a situation that I did not have a diversity of credit. I only had real estate and automobile credit (within the last 24 months). When you go debt free, it will be fine until the 24 month mark and then your score will drop and you won’t know why.

He said I needed to buy some things on installment. Items like refrigerators or TVs instead of paying cash. I also needed to have some credit cards even if I just bought a flashlight with it. I was just like a kid out of school again. Not bad credit, but no credit. He said my credit report was 3 pages long (that included the “who you are and where you have lived” page) He said I needed at least 8 pages of report for a person with my income.