[Calc Review] Help me analyze this deal

[Eldon S. Bailey]

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[Jason Leavitt]

 Good cash flow, moderate appreciation, looks good to me but I am no expert. Will be interested to see what others think.  I have been thinking about investing in Utah also but do not know the area very well yet. 

[Eldon S. Bailey]

I actually had more information in the post, but it didn't show up for some reason. 

I'm trying to find my first property and was quite interested when I ran the numbers on this one. The problem is I don't have all of the down payment. So I was hoping for advice on good creative financing solutions for this situation. I considered house-hacking with an FHA, but the numbers fall apart. Should I try hard money, private money, or something else? I'm researching like crazy on my own, so any input would be greatly appreciated.

[Mark Safrin]

Originally posted by @Eldon S. Bailey:

I actually had more information in the post, but it didn't show up for some reason. 

I'm trying to find my first property and was quite interested when I ran the numbers on this one. The problem is I don't have all of the down payment. So I was hoping for advice on good creative financing solutions for this situation. I considered house-hacking with an FHA, but the numbers fall apart. Should I try hard money, private money, or something else? I'm researching like crazy on my own, so any input would be greatly appreciated.

A HML is probably not an option here. Alas HMLs that I know about do not lend 100% of ARV. You would still need a hefty downpayment (Unless you can get owner financing or the like, perhaps as a second position lein?), much higher closing costs and the interst rate would be considerably higher than the conventional loan in your original post.

[Jaiden Olsen]

I'm not sure where you are getting your pro-forma rents, but those look super high for a 2/1 Roy apartment. A quick google search shows that this 4-plex was recently rented at $645/unit. Looks like the deal may fall apart using those numbers... 

[Eldon S. Bailey]

Thank you Jaiden.  Those rents are substantially below market, but you're right, those numbers definitely don't work.  I appreciate you finding that for me.

[Casey Christensen]

Hey @Eldon S. Bailey - I had the same concerns about the rents as Jaiden Olsen. Are those Pro forma rents including any updates needing to be done to the property in order to get that kind of increase? If so you will want to include the rehab money in the pro forma which will change your CoC return. I would also check with a PM or two to confirm those rents are possible, unless you are super familiar with that area. The other area I though might be a little low, is maintenance expense. You are showing 3% for that expense, but unless its a pretty new property or has been completely upgraded recently I would plan on that expense being closer to 7-10%. I would also check with a few lenders to see what closing costs will be, they may be a little low on your Pro forma. I have heard recently that Mountain America Credit Union is offering loans on investment properties for only 10% down. You may want to check with them and see what details they have. This would reduce the money needed to get in, but would also impact the cash flow.

[Eldon S. Bailey]

@Casey Christensen thank you so much. Yes, as I am learning (from your input, podcasts, reading, etc.), I can see my numbers getting more accurate each time I analyze a property.

I appreciate the input you, and others, have given. When I finally close on the RIGHT deal, I'm going to have a lot of people to thank for it.