All Forum Posts by: Andrew Baines

Thanks for the reply. We made the best and final round (assuming everyone does with a Fannie Mae property) and upped our offer to $110k. We found out yesterday someone bid higher and we didn't win.

Andrew

0 Votes

Working on analyzing a project that my partner and I want to put in an offer today. It's a foreclosure in an established area of the Detroit suburbs. One of the units is currently occupied and the other is vacant. The current tenant is paying $715 / month, on a month to month lease. The below assumes 50% of the gross income from the property goes to operating cost and taxes.

Any thoughts would be great.

Date:	4/18/2016
Project Name:	26531 Coolidge Hwy

Number of Units	2	Going in Cap Rate:	8.3%
Year Built	???	$/SF	$130.208333333333/SF
RSF	768 RSF

Acquisition Uses and Sources of Funds
Uses of Funds			PSF	Nominal Value
Purchase Price			$130.21	$100,000.00
Acquisition Costs			$3.26	$2,500.00
Renovation Budget			$10.42	$8,000.00
Other			$4.16	$3,197.75

Total Uses of Funds	$113,697.75


Sources of Funds		% Total Cost	Interest Rate
Total Equity (includes Acquisition Costs)	25%	$28,424.44
Mezzanine Loan Amount		0%	0.00%	$0.00
Total Senior Loan Amount		75%	4.50%	$85,273.31

Total Sources of Funds	$113,697.75

Income		Monthly Rent	Annual
Two Bedroom Units	2		$715.00	$17,160.00

Gross Potential Rent (GPR)	$715.00	$17,160.00
Other Income				$0.00

Gross Potential Income	$17,160.00
Less: Vacancy & Collection Allowance		5.00%	-$858.00

Total Income	$16,302.00
Operating Expenses (Detailed Below)
Total Operating Expenses				-$8,018.00
Net Operating Income (NOI)
NOI				$8,284.00
Net Income (Pre-Financing Costs)
Net Income (Pre-Financing Costs)			$8,284.00
Financing Costs (Taken from Financing Section above)	Monthly	Annual
Financing Costs			-$432.07	-$5,184.81
Net Income (Post-Financing Costs)
Net Income (Post-Financing Costs)	$3,099.19
Initial Period Metrics
Unleveraged Cash on Cash Return			7%
Leveraged Cash on Cash Return				11%
GRM (On Purchase Price)				5.827505828
Percenatage of After -Tax Income	$45,000	28%		26%
Pre-Tax Monthly Cash Flow per Door		$129.13
Discount Service Coverage Ratio				1.60
IRR				17%
Cost/Unit				$50,000.00

0 Votes

Thanks for the messages back! Kind of surprised at the response actually.

Mitchell - you're right, the prices are high in Royal Oak. I'm seeing things move quickly at $120k/door and up. We're planning on joining REIA of Oakland County. Do you have any suggestions?

Not really looking in Livonia but know that the west suburbs are growing.

Andrew

0 Votes

I'm a new member to BiggerPockets. I work in the commercial real estate industry full time and listen to the BiggerPockets podcasts on my commute. That's how I was introduced to the BP website, forum and blog community.

I recently started a real estate business with my cousin in law (sounds more complicated that it is) and we've joined the local REIA. Our investing focus is 2 to 4 unit multi-families.

I live in Oakland County Michigan and I'm interested in discussing all locations of commercial real estate in this area.

We're focused on investing in:

Birmingham, MI

Royal Oak, MI

Grosse Pointe, MI

Detroit, MI (Woodbridge, Indian Village, Brush Park, M-1 Rail Line)

Ann Arbor, MI

and any other Michigan locations that people are interested in discussing

So, thanks for having me. Excited to be part of the community.

Andrew

P.S. To anyone that listens to the podcasts regularly, when is Brandon going to start dishing it back to Josh Dorkin?

2 Votes

All Forum Posts by: Andrew Baines

Andrew Baines has started 2 posts and replied 4 times.

Post: Deal Analysis - Foreclosure Duplex

Post: Deal Analysis - Foreclosure Duplex

Post: Long Time Listener, First Time Poster - New BP Member - SE MI

Post: Long Time Listener, First Time Poster - New BP Member - SE MI