2 fixed rat, long term conventional loans closed!

[Graham Nash]

Closed on 2 fixed rate loans, to purchase 3 units.

The numbers:

Property A) 1300 sq' brick, 3/1.5, SFR, rents for $875 per month.

Property B) 2150 sq’ brick 3/1 & 2/1 Duplex, rents for $1075 per month

Asking price=$120,000

My first offer, $92,000

Purchase price= $111,000 (negotiating is not my strong suit…)

Gross monthly income=$1950

Cap ex, rep & main, vac, prop mngnt, garb, P&I, =$1510

The owner would not sell the properties as individual. The agent is a commercial agent and accustomed to dealing with investors who use commercial financing. I was determined to acquire a long term fixed rate for the properties. I found a loan officer @Jerry Padilla with MB financial, through BP, and was able to obtain 2 fixed rate, long term loans.

We did have to extend the original contract by 11 days, which in the big picture, wasn’t a big deal to the agent or seller. I tried to make it a point to communicate with them, as to where I were in the loan process.

Takeaways…

The formula I was using to purchase these properties was based on previous purchases in c neighborhoods. These properties are in B neighborhoods. They are in much better condition, and require no repairs, or clean out. All repairs were made prior to closing.

After closing, the seller pulled me aside and said he has one more property that he is going to be selling in a month. I told him I would try to offer, but I need to replenish my funds. He then offered possible seller financing. So that’s in the works now.

The agent also asked if he could share a 4plex that he was getting ready to list. I should get that email in a few days.

I owned 3 doors prior to this deal, now I own 6. While I don’t think this is a great deal, it cash flows nicely, and should do well for a long time.