All Forum Posts by: Account Closed

Your right in that case my offer should be $150,000 because;

At $170,000 P&I for $170,000 (30yrs, 7%) = $1131 per month which is at least $100 less than the NOI of $1250 per month.

Therefore $170,000 minus rehab of $20,000 = $150,000 offer price.

That would put my offer at 73% of the banks asking price of $205,000. From the other forums I hear the banks will take no less than 65% of fair market value.
In current condition (apartments need rehab) I would expect fair market value to be around $225,000 based on the bank pricing 10% below fair market value in order to move the property. Recent sales indicate that the property would be at least $50,000 more although there have only been a few sales in the area.
My offer being at 66% of fair market values seems unlikely that bank would accept. Any thoughts?

In order to obtain 100% financing I would assume that you would have to build a good reputation in order to secure the loans for each deal. Have you always used 100% financing or did you start with you own cash?

Ok great. The floors are wood and have a few small black spots that indicate very minor water damage but I feel confident that there is no major structural damage after reading your response. Thanks!

You should be able to find cashflow positive deal under $80,000 but they usually need rehabbing. As long as there is cashflow now when the market comes back you get capital appreciation.

I have been looking at a property that has a severe roof leak. Is there anyway to tell how much structural damage the walls have without busting them open? The walls are wood frame.

Ok got you. What is you target cash on cash return for SFR?

Thanks for your analysis. I did forget to mention that I am putting 30% down and paying cash for the renovations.
So my figures look like this:
purchase price 200,000
deposit 60,000
Mortgage 140,000

Gross rents: 2,500 p/m
NOI: 1,250 p/m
Mortgage: 931.42 (30 yr 7%) p/m
Cashflow: 318.58 p/m

I guess the main issue is the amount of equity I am using to generate the cashflow. ($60,000 deposit + $20,000 for renovations =$80,000) Also the built in equity of $100,000 as a secondary factor has to be considered. Is there a way to add the equity into the equation?

The property is a 3/2 main house with two 1/1 apartments out back. The apartments rent for 500 each per month and the house for 1500-1600 per month. Purchase price is 200,000. Comps 300-350,000. Main house needs roof repair or replacement. The apartments need a new roof and renovating. The main house has been 90 percent renovated (new kitchen,bathrooms,ac,electrics,doors and fittings) and only needs some finishing touches.
I plan on living there with my girlfriend and renting two room to our friends for 450 per room all inclusive.
Taxes are 7,900 for the 2008 year to be appealed in September based on purchase price of 205,000. Insurance is figured at 341 based on 2% of purchase price.
My question is if I had to move out and rent the house is this a good deal?