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Updated almost 7 years ago,
Need deal structure tips - CFD
Hello,
I am working with sellers on a two property deal. Property #1 is a SFR a few blocks from University and property #2 is an 8 unit building close to campus as well. The sellers are willing to do a contract for deed sale with approximately 5% down. At this point I have made my offer and they have countered. I will post the numbers of my estimate of where I think final numbers will end up and update if necessary. They are motivated to sell the SFR as it has been sitting vacant for over a year but they are not motivated to sell the 8 unit building. Sellers are planning on moving out of state and selling all properties in a couple years. Any advice or suggestions from past experiences on ways to package to two properties together would be most appreciated.
Property 1 - 1890's SFR on small lot near Campus
Purchase Price/Down Payment: 130,000 / 5,000
Annual rent: $14,400
Vacancy: 720
Taxes: 1,662
Insurance: 800
Property Mgmt: 1,094
Repairs/Maint: 1,000
Cap Ex: 1,200 (will need shingles and water heater w/in 5 years)
Misc.: 750
NOI: 7174 - Debt Service: 6250= $924/year cash flow= 77/month
Initial CoC return: 924/5000=.1848
Property 2
Purchase Price/Down Payment: 165,000 / 8,000
Annual rent: 28,800
Vacancy: 1,440
Taxes: 2,868
Insurance: 1,000
Property Mgmt: 2,189
Repairs/Maint: 1,200
Cap Ex: 800
Misc.: 1,000
NOI: 17,603 - Debt Service: 7,850= 9,753/year, cash flow= 813/month
Initial CoC return: 9753/8000=1.219