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Updated about 10 years ago,

Account Closed
  • Investor
  • Waynesville, NC
121
Votes |
408
Posts

Is low down seller financing worth doing a deal you would normally pass on?

Account Closed
  • Investor
  • Waynesville, NC
Posted

I was presented with a  deal today that I would normally pass on, but the seller financing at 5% for 20 years with low downpayment (as low as $25k) is tempting me a lot. It is a 19 unit, all 1 bed 1 bath efficiencies. I have not been visited the property and do not know if there areHere are some details:

Asking Price: $350,000 (running the numbers at $300,000 to make cash flow more desirable)

Monthly Numbers (my estimates are in bold, everything else is from the seller):

Rent per unit ~$421.00

# of units 19

Annualized rental income $96,000.00

Expenses:
Vacancy $9,600.00 (10%)

RE Taxes $6,000.00

Insurance $1,500.00

Management $9,600.00 (10%)

Maintenance $9,600.00 (10%)

Utilities $20,200.00

Reserves $4,800.00 (5%)

Operating Expenses $61,300.00 (71%)

Net Operating Income $34,700.00

Debt Service: $1,815 ($25k down, 5% for 20 years)

Cash flow: $1,077/mo

1 year CoC: 51.7%

So, this is a deal I would not normally go for because I don't like the 1 bedroom 1 bath unit mix. But, with the seller financing and low down, it seems  like a good deal. What do you guys think?

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