All Forum Posts by: Benjimen Elliott Johnston

You might check with an Attourney first, but a friend of mine in Atlanta sends a notice he will be working on the front door. He then goes and takes it off the hinges and takes it home, leaving the Home exposed. Or he says he is working on the AC unit and disconnects it. He may do both. They get uncomfortable, enough they move. I don’t know that I have the kahunas for that, but it works for him.

I’m looking at a 24unit for $980,000. Rent is $550/unit and rents can eventually be raised to $600. They are all 3/2. 95% owner financed at 4.5% for 20 years. I thought this was a very good deal, but your deal seems much better.

Andrew Johnson. Thanks for the reply. Partner is just finding tenants and taking care of paper work as a side job and not really "managing". Sorry if I misspoke. She is the one that told owner that he probably could raise the rents. I'm familiar with the rents in this area and feel that she is correct but don't want to depend on that as means to cash flow initially. As of now this deal doesn't cashflow enough for me to take on risk. Makes much more sense with 20-25 year schedule and smaller price for property. We both have cash to put down or take care of maintenance issues and can do conventional financing but want to use owners money. I read somewhere where I am limited in number of properties if finances traditionally and I'm under the impression that the bank would not consider these if owner financing if I wanted financing on SFH in future.

John Warren

Thanks for your comments. I ran the numbers after getting Taxes $8000 and Insurance $8500. Estimated repairs at $8000( may be too low) and it doesn’t cash flow enough. Tenants pay all utilities including trash. Lawn maintenance and pest control are the only expense outside of repairs, taxes and insurance. I agree it isn’t a good deal as is. I want to be creative in suggesting other options so it cash flows better. 

Julie Haveman

I agree totally on cleaning lady and appreciate your suggestions on amortization. I will look at that as an option. 

I have a partner who has found a 100% financed deal in rural area. Owner is about 75. 24 units(duplexes) so 12 buildings. My friend has been managing this property for 4 years( screening tenants and leasing properties). Only one unit is unoccupied(painting to turn over for a new tenant) and one unit is lived in for free by an on sight “cleaner” when apartments turn over. Four units are rented through HUD. The owner and family do maintenance and lawn service, so I’m not sure if I can get an accurate figure on what that would cost. They are all 3BR/2BA and rent for 550/month. Owner wants 950,000 at 7% for 15 years. He started at 1.2 million. Payment around 8,500/month. I believe rents can be raised to 600-650 but need to research area and don’t want to plan on it. I’d prefer to stay conservative. I’m waiting on tax and maintenance costs( pest, parking lights, repairs, lawn). The units look well maintained on the outside. I’m told they are well taken care of on the inside as well. My concern is cash flow for now and if I want to sell in the future. I don’t want a second job as a maintenance man for 24 units if they just break even. I’m looking for creative alternative financing options that would be a win win. I’m told owner wants cash flow for retirement. Partner would handle the leases and I would do inside maintenance. It seems like a decent deal as is, but if they become harder to rent due to no growth in area then it may become a real headache to cash flow. Any advice would be appreciated. We are still in pre negotiation phase.

Partner and I have made an offer twice on a commercial lot owned through foreclosure by a regional bank. No budging. Local guy says it is out of his hands and that bank has five years to write it off. The price has been reduced twice in the past year, but our offer is only 45% of last listed price. The property is currently not listed as of last month. I was thinking of making same offer with closing date of April 2018 which would allow the bank to write more of it off, but lock us into the property. Has anyone done this and is it even a possibility a bank would consider? I'm trying to sweeten the deal to the bank without increasing the cost. Due to the extensive rehab necessary, a price increase does not make my numbers work and is a deal breaker.

I'm not sure of the exact zoning but it currently has 5 buildings, 4 of which will be torn down. The 4 buildings make up abou 24 old hotel units. It is not residential so I think zoning will be fine, but I will definitely confirm. I'd like to get the 30 year note with a more fixed rate on the 4 unit apartments if possible verses a 15 year non fixed rate. 

I'm looking at 3.4 acres of property. I was wondering if I surveyed and divided it into say ten lots with common parking like a condominium, would I then be able to build 4unit apartment buildings per each smaller lot and finance each 4 unit apartment like a house with a traditional mortgage on each? I was hoping to develop it slowly over time anyway.

I'm not sure if this will work, but I recently looked into this for a piece of commercial property. Talk to the bank first. If they will allow and you have the money for a survey, Have the lot surveyed into sections and if the bank will release the portion not containing your existing home. Refinance your home and use equity to build on other lot portions. Check with building codes first to make sure you can build.

My question is about approaching the bank on a bank owned property. I am working a deal with a partner to rehab an old hotel into apartments. I have worked all my numbers and the deal is only good if I can get the property for a fraction of what they are asking. The property is 3.4 acres with lake access and view. It has five buildings two of which need to be torn down and three which can be rehabbed. The property is listed for $259,000. Recently two acres on the water sold for just $60,000. The bank is giving no value to the buildings but I've been told it would cost $70,000 to tear down and remove the buildings. To be fair the bank property is in a great location, but to make any cash flow from the conversion we can't pay more than 90,000 and would like to get it for less of course. Bank says it has only been on the market 8 months and they have five years to Wright it off. Any thought on approaching this over time.

No