Acquire 6 properties for no money down: Having a hard time saying no, should I go for it?

[John Ellis]

By luck or maybe not I received a call about acquiring 6 properties. I need no money down but I am responsible for the loan payment and back taxes. I normally do 1 SF rental at a time so this sort of deal I am having a hard time analyzing. This is all the information I have. I did speak to all but 2 tenants.

Loan: 42,000 @10% interest only payment of about 500.00 ballon due in 3 years

Back Taxes: $13,720.55

2 properties are on lease to own:

Property 1 for 35,000 $575.00 per month

Property 2 for 50,000 $675 per month

Property 3 is rented for $400 per month no lease

Property 4 is rented for $400 per month no lease

Property 5 is rented but not paying no lease

Property 6 is rented but not paying no lease

Property 3-6 are in D neighborhoods Property 1 and 2 are in C neighborhoods.

Issues/Consideration:

Properties will not appreciate if at all as they are in the city of Cleveland so realistically I do not want to plan for appreciation.

I will not manage these properties and will hire a property management company

I have 4 other rental properties

I really don't have an exit plan

42,000 is a blank lien on all properties. Which I think will make it almost impossible to sell individually (Company will release home for 7500 per house but lien will still show up. I just don't see an investor OK with that.

Here are expense numbers:

Taxes(Which I will go to county to lower values but this is where they are at now:

$793.04 taxes

$198 Insurance

$500 Loan

300 Management

A deal this big (for me) I just want to make sure I have a firm grasp as what I am getting into. The no money out of pocket is what is intriguing, I think.

Deal or no deal?

[James Wise]

No Deal

The P.M will be higher than $300, but even using your numbers with the 2 tenants not paying rent your only collecting $2,050.00 a month & your fixed expenses that you've shown is already $1,800. What about maintenance? H20 bill? The cost to get the non paying tenants out? The cost to get the non paying tenants apartments rent ready again? All of this to deal with how are you going to pay the back taxes and still have money to pay that balloon in 3 years?