Private Lenders : Advice on the numbers

[Tanya Maslach]

Hi all,

This is for either private lenders or investors who have experience financing their properties with private lender support.

I have a 3 specific deals I'm analyzing (Ohio) and would like to know if I'm looking at this the right way. Prop details and my questions are below. One of those deals we (my husband and I) are financing with a HELOC.

The other deal we want is below.

Property (1) Details: 
MF - 2 units.  3/1 per unit. Almost turnkey. Just cosmetic updates.
Less than 1 mile to major hospital in Columbus. (Hospital is spending $3.1 bil to build out infrastructure, and is currently purchasing houses in area to support staff requirements)
Days on Market: 112

a. List: $339
b. Offer: $310K
c. Down: 25% ($77,750)
d. Rehab/Updates Cost: $12K
e. Cash flow: $1121/month
f. Est ARV (on an MTR): $365,000
g. CoC: 14.8%
h. ROI: 19.8%

I'm interested in private lending financing this deal and wondered:

a. Are the following proposed terms out of the ordinary or am I thinking about this wrong? 
   
Down payment + primary home loan for 5%, on a 12 month term with no PPP? 
SO:   $77K down + holding the loan. 


OR

Our financial and management responsibility for this deal would be sweat + financial equity (prop mgmt, GC work on site, purchase and install all furnishings (for an MTR)).

Thank you for you feedback and guidance on this.

Tanya

[Chris Seveney]

@Tanya Maslach

You mention ARV as a MTR but a lender is not going to look at it that way they are gonna look at what the property is worth a single family home

If you go DSCR they will take lower if 75-80% of appraisal or a coverage ratio.

So you will need the $77,7500 + around $30,000 in interest payments plus + closing and refinance which probably another $10,000.

I think that will adjust you cash on cash etc