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Updated 5 months ago, 07/16/2024
What are my options to make this deal work?
Nice mixed use property came up for sale practically in my back yard in rural, south of Pittsburgh, Pennsylvania. 10 residential apartments + 3 commercial spaces. They are asking 950K.
Gross rents: 100,800
Utilities: 3K
Insurance: 7K
Property taxes are roughly 10K for each 450K in value.
Repair/Maintenance: Don't have figures yet but I'm assuming it'll average out around 10K a year.
The lender I am speaking with also requires me to also include an 8% vacancy rate and a 5% management fee whether I have those or not.
With an interest rate of 8.15% and 20 year amortization, I can't get close to a 1.2 DSCR until my amount borrowed is down to about 450K. That with a 150K down payment is only 600K.
Short of asking the seller to carry the note at a lower interest or putting down a much bigger down payment - what am I missing? Thanks for your help!