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Updated over 9 years ago,
1.7mil for 6 4-plexes How to get this done?
I have stumbled into a large deal. There is a single investor who is selling a 14 unit building, an 8 unit building, 6 4plexes in the same neighborhood here in Jacksonville FL.
I have included the BP calculator results below for the 4plexes, I'm not interested in the larger properties.
Issue is, I don't have the 25% or 20% payment to swing to get a commercial lender to take this on. Also at this price, the debt service coverage ratio is a bit on the low side.
There are alot of things I don't know yet like why he's selling, condition of the inside of the units etc. I have walked the area and talked w/ another owner of a building on the same street, she said she had been pretty happy with hers, and another guy who lived there said that the people in his building had been there for years and felt the area had gotten better over time.
I had a coworker that initially said he would partner up with me but has since pulled out because they may move in a few years to retire. I have also reached out to a person my real estate attorney introduced me to to see if he's interested in partnering up.
Let's assume that I consider this to be a good enough opportunity to make a serious go at, I have a few questions in how to approach it.
If I take on a partner, how should I structure the relationship and what are a few things that experts reading would recommend?
If I can't find an interested party, how do I take down this whale without totally risking my family's safety and well-being?
average rent per unit | $ 708.33 | Sales price | $ 1,685,000.00 | ||
# of units | 24 | less | |||
Annualized rental income | $ 204,000.00 | Down | $ 421,250.00 | 25% | |
less | percentage | Repairs | $ - | ||
Vacancy | $ 20,400.00 | 10% | Total Investment | $ 421,250.00 | |
RE Taxes | $ 18,450.00 | Loan | $ 1,263,750.00 | ||
Insurance | $ 10,200.00 | Terms | |||
Management | $ 20,400.00 | 10% | 4.25% | Interest | |
Maintenance | $ 10,200.00 | 5% | 20 | Amortization | |
Utilities/HOA | $ 9,000.00 | DEBT SERVICE | |||
Reserves | $ - | 0% | Payment | $7,825.58 | per month |
Operating Expenses | $ 88,650.00 | 48% | $93,906.91 | per year | |
Net Operating Income | $ 115,350.00 | ||||
less Annual Debt Service | $93,906.91 | DSCR | 1.228344 | ||
Cashflow | $ 21,443.09 | Cap rate | 6.8% | Monthly cashflow | $ 1,786.92 |
CCR (%) | 5.09% | ||||
deposit in bank | $ 52,043.09 |