All Forum Posts by: Chris Nerio

Thanks @Steve Rozenberg, I appreciate your input! Yes, I am trying to stick to my strategy which is a play for cashflow right no which is why this deal doesn't work out at the current loan details. This has been a 2 year process to get to this point and this is all new to me. Thankful for a site like this where people can help me think.

@Zach Stillman This is great info Zach! I'm assuming I can go on the county or city gov page and get the rates? Will it increase at the exact sale price value or assessed value for the county or city?

@John Andrews Property has been on market 28 days. As far as I know, one offer has been accepted but funding fell thru for the buyer but to answer you question, no it has not been under contract previously. I have never worked with this agent before. 

Thanks @John Andrews I appreciate that! 

Hey @Erik Hatch since I am buying out of state I have not been able to inspect. I have not offered anything yet either though. My realtor hasn't been able to get inside either, due to the tenants. She says it looks well maintained from the exterior however. She said I would have 10 days after an accepted offer to inspect and do the deal or not. Should I reach out to a new realtor? Mind you, since I am not from the area my relationships in St. Louis are basically none. 

@Erik Hatch So the seller is asking for $235k. I told my realtor what she thought about asking $220K. She said it was too low and to offer $225k. The property would be sold as-is and the seller is not providing any disclosures really. I do know that 3 of the 4 units have been "remodeled." Not sure exactly what that means but from talking to the  listing agent, it sounded like the basics (floors, paint, cosmetics). Obviously would like to offer as least as possible. 

@Craig A. Schumacher Thanks Craig! Yes, that’s what I’m negotiating now. I’ve told the lender that 20 years doesn’t work for me and that I wanted a 5% interest rate max. We’ll see what they say. I agree, it’s not worth the hassle at the current deal.

FYI, property is fully occupied. Tenants are month to month. Rents are below market. Potential rent is between $33,600- $31,200. 

I think I can at the minimum without much improvement, within the next 6 months raise rents to $600/ mo or $28,800 gross rent. 

Hey everyone, I'm looking to possibly put an offer on this deal for a fourplex in St. Louis. 

Purchase Price: $225K

DP: $45k (20%)

Annual Gross Income: $27,060

Total Operating Income: $27,648 (less vacancy at 4%)

Total Operating Expenses: (including 5% for Maintenance, 10% for property management, taxes, insurance)

NOI: $17,053

Annual Cash Flow: $2498.60

Monthly CF: $208 (less mortgage (principle, interest,  @ 5.25%, 20 year ammort.)

My estimate for my investment is about $50,000 all in. (closing cost, dp, minor repair)

So that puts my cash on cash at about 4.99% correct?

And cap rate is 34%?

Am I doing the math correct? My concern is that it seems like a lot of cash out of pocket for minimal monthly cashflow? Am I missing something?

Any thoughts on the deal?

Thanks everyone!

Thanks @Erik Hatch. Yes, @Jared Rine and @Gaspare U. I'm negotiating now for a longer term. Thanks!

@Erik HatchThanks Erik. Do you think I can get a better loan? Since 5.25% seems high?