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Updated almost 2 years ago,

User Stats

38
Posts
15
Votes
Trent Barga
Pro Member
  • Real Estate Agent
  • Dayton Ohio
15
Votes |
38
Posts

First MF Deal - Need confirmation

Trent Barga
Pro Member
  • Real Estate Agent
  • Dayton Ohio
Posted

Hey all have my first MF deal I'm working. It's a D property in a B+ to A area. Long term owners who haven't managed well. Not updated at all. Lots of value add here. 

Numbers: $700k purchase on 2 - 4 unit buildings (8 units).  Getting $750/unit (roughly). Bank is asking for 25% Down ($175k) on a 20 year loan with 5 year adjustable. Interest rate will be around 6.5 to 7.25%. Taxes around $4k per year and assuming $3k for insurance. Property has baseboard heat and window units so low cap ex there.

I have Home Equity Lines up to $225k so part of that will be for the DP of $175k the rest used to update exterior and other vacant units. 

Once updated and cleaned up I can get $950 for lower units $900 for upper units. 

Goal would be to refinance the entire loan if rates are lower to get my DP/Rehab cost back. Or if rates go up get a second line to pull my home equity line out so I can free it up.

Once I get property stabilized I believe the value would be around 1.1 to 1.2 million with a 7ish cap (same cap rate I'm purchasing at)

I'm back and forth on if this is as good as I think it is. Currently have other purchases and businesses going so trying not to stretch out reserves and monthly income too much.

Would love your educated thoughts on the deal!

  • Trent Barga
  • Loading replies...