Am I going about this the right way?

[Diana Cruz]

As a beginner in wealth building and looking for long term residual income I am taking that first step. I have made an offer for 11 duplex homes that I will be renting. I am waiting for a reply to my text ed offer. I have been looking at two sets of properties that needed some renovation and could bring in a monthly income. I have analyzed and analyzed and re analyzed. Looked at the units once and twice and three times over. I contacted the seller even though when we spoke he was a little adammit in selling because he could get more for his properties but I also wanted to make sure I was going to make a profit and not end up on the short end of the stick as they say.

So I looked at the value of the homes (11 duplexes with 2 br apartments each) which are being rented between $450.00 and $550.00. I added that to my calculations for my GI. Then I started looking around to see what the prices for repairs were and came up with around $25,000.00 and I really think it will be less if I am creative with my rehabbing. Now I want to rehab them to build the assessed value of the units from $36,000 to around $60,000.00 by replacing window, kitchen cabinets, full bathroom renovation, making sure my electrical is good, fixing the landscaping and paving the drive ways. Well I hope it will bring the value up that much. Not sure and not sure if the $25,000.00 will do it either I'm thinking more like $50,000.00. Any way. I have been looking to see if I could get funding for the project but seem to keep running into a credit issue. I haven't given up yet because I texted the seller and asked if he was still interested in selling all 11 units and he said yes I said great will get back to you soon $400,000. correct? Well I am still waiting for his reply. He did mention $440,000.00 which brings each unit to $40,000 and I did offer $400,000 which brings the units to roughly $36,300.00 which is not bad cause some of the units assessed values are $38,900.00 So I am following one of the rules of being an investor which is never pay the asking price. Okay I did not follow the rule of offering the lowest price but I am working on my negotiation skills. I already know that the insurance on the bulk units is going to run me around $5,700.00 a year. Takes are around $8,800.00 a year and my holding will run me around $1813.00 not including my the funding payment I will need to make. My GI is between $9,900.00 and $12,100.00 Once I fix it up I will be looking at a GI of $13,200.00 I was hoping to do a joint venture but no takers yet.

I would like to know if I am doing my calculations correct because I only own one shirt and if I loose it I will be the king with the new clothes. No just kidding I would have to find a buyer and quick unless I could correct the issue before it happens. Preventive services and due diligence. I have looked at a few scenarios and they look good but I am stll not sure if I am calculating everything that I should.

But I am not sweating it just yet I still have to get a yes from the seller and then I have to put it in writing and see if I could get 100% financing for it. That mean I might have to get 2 mortgages or a blanket loan that will cover rehabbing the property Correct?

Well I hope I can get some good advice as to which way to go because timing is of the essence.