What do you think of this deal?

Financing, Hard Money Lenders, Private Money
1

Listing price is $259,000
4 fam, rents are 600 (bdr), 600 (3br), 700 (3br), 750 (4br). Rents should easily be able to come up some.
Taxes are $2501
Utilities are paid by tenants
I’ll be doing an 80/20 to avoid mortgage insurance, the first will be interest only. I calculated using 7% for the first, 9% for the second.
Not really sure what insurance will run, used $100 month to estimate.
Used $1200 as snow removal estimate, that’s probably a high estimate as we only get 8-10 storms max that require plowing and there are tons of guys that will do it cheap around here.
Used $250 as an estimate for advertising budget.
Subtracted 7% for vacancy and 7% for maintenance, I will be maintaining mostly myself.

According to my estimates I’d be getting around $225 a month positive cashflow, does this sound about right or am I missing something?

Oh and MLS says $5878 for gross expenses, not sure what that includes. (maint? plowing? taxes?) Anyone know what they add up to get that figure?

2

Rich,

Here’s what I get:

Income: $2,650

Outgo:

P/I: $1,796
Taxes: 208
Insurance $$$
Maintenance 200
Management (7%) 186
Misc (Snow/Ads) 125
Vacancy (7%) 186

Total $2, 701

Cashflow (-$51)

…and, insurance is still an unknown.

Have you talked to the seller about a possible owner financing?

My two cents.

Keith

3

It actually does mention possible seller finanacing on the MLS for this listing, not sure what the terms are. I’m figuring out the cashflow worst case scenario (in other words bank loan for the 20%) should the seller finanacing not work out.

4

The rates and program you are talking about… I would love to know that bank, because realistically not many institutions will do a interest only 1st mortgage, and interest only heloc as a 2nd. Especially on an investment property and a multi unit too. Realistically, your looking at a P and I 1st at a rate of approx 8+ percent now that the fed when up, and a 2nd of probably 11+

Just my 2 cents.

Tom P.