I need feedback!!!

[Bobby Beard]

Ok here goes, first post also!!

Found a property about 40 min from me. It is a 12 unit building with 2 Commicial units in the front. It has 4 two bedrooms and 8 one bedrooms. The Commicial units need remodeling hasn't been rented in several years. Current owner uses as storage. It also has a small tenant laundry room. Don't know the income of that yet. The two bedrooms go for 440.00 a month and the one bedrooms go for 400.00. I do believe these are low and could be raised. The property stay at 100% occupied most the time. The current price is 314k my agent believes I could get it around 280 to 290k. The best part is the current owner (since 2004) is president of a local bank, according to my agent the banker would push a loan through his bank with ease and not a lot of hassle. Also believes I could get in with 10% or less down.. The paper work I have shows expenses at 12k a year and NET of 54k a year. This would be more if i raised rents and got the two commicial units rented. The tenants pay their own water and the taxes are 3400 a year.

Does this look to be a good deal?

I have two other single family properties and my current house and they are all paid for. I have no debt at all. Would this property be worth going into debt for?

Also before starting my own business 10 years ago I was maintance supervisor at several large apartment communities. So all work and maintance I could do and save the money.

Please share your thoughts with me!! Thank you!!!

[Joel Owens]

4,960 a month without income from front 2 commercial units.

12 months is 59,520 annually by half cost is 29,760 NOI

10 cap is 297,600 purchase price.On it's face it looks promising.If the guy is a president at a local bank and it is cash flowing like a monster then WHY does he want to get rid of it??

"Also believes I could get in with 10% or less down."

At what debt service (fixed interest rate), amortized over how many years (20,30,40),with the note due in how many years 5,10,15 etc.??

The debt service is just as important as cash flow and purchase price.

The value is based on 100% occupancy.I am thinking you will find upon research on his records slow pay tenants,evictions,turnover,waiver of security deposits or reduced deposits,free rent or half first months rents,deferred maintenance, costs shown higher than stated etc.

When you verify look at schedule E tax returns and bank deposits showing cash going in every month.

If you can get in leveraging at 90% LTV that is great.