Thoughts on this deal???

Any thoughts on this property???

Possible 4/5 family. 1 unit does not have heat source, realtor says that b/c of this financing could possibly be for 4 family and not commercial….any thoughts on the veracity of this statement? How should I position it with the lender?

Assuming 4 family works out the numbers would look like this?

Purchase price - $270,000
With 10% down - $27,000
Finance (7.75% estimate) - $243,000
PITI – appx - $1800 per month

Of the 4 units – 2 are currently rented:

Unit 1 – 2/1 (not rented) =$600
Unit 2 – 4/1 (rented) = $900
Unit 3 – 4/1/ (not rented) = $850/$900
Unit 4 – 3/1 (rented) = $800

Estimated Gross Rent = $3100
If section 8 tenants = $3962

Expenses = $7782 (ins $1500, taxes $2900, mgmt fee $2232, main $250, electric $300, water/sewer $600).

Vacancy loss factor = $3100

NOI = $26,318

Cash flow after interst expense, taxes & expenses = $5713

Pro’s of the property –
Units are in excellent condition (best I have seen) everything is new….the units are huge.
The units are all deleaded.
The 5th unit needs a heating source, stove and refridge and would then be worth an additional $600 a month.
All the utilities are separate, the roof is new, the house is vinyl sided, the windows are new, the stairs and porches are new.

Con’s of the property –
THERE is no parking and no way to add a parking lot. It is on a main road that does allow parking, but not in the winter. There is a bus system but there is not a close bus stop. The property has been on the market for a while…which makes me a little nervous. It is price well for the area. Worried about resale…because of the parking situation.

Any thoughts would be welcome and appreciated…

You could try and cut some kind of deal with a local lot and include a space with rent.

Rent one space from each of your neighbors if possible. I found a guy to rent spaces to me for 12.00/mo each. You gotta ask to get.

I would try to find some way to resolve the parking problem first. Otherwise, your figures, which seemed to be based on the assumption that you can keep all units rented, might be different in reality. (I noticed that 2 are not rented now - is this due to the parking problem?). If you only keep three units rented on average, it becomes a money loser. It seems like there must be some creative way to arrange parking.