All Forum Posts by: Dan Cho

Thanks for the heads up Daniel. I didn't know if banks would be interested in this.

I'm sorry just to clarify, seller willing to finance only 30% and wants 70% for down payment.

So I recently came across a deal where there is a duplex with 3/2 bath and 2/1 bath upstairs. The plot also contains 9 studio apartments. I have some heloc available and I will outline that information below.

Purchase Price: $575,000

Revenue: $100,183

Expense: $33,355

NOI: $39,113

Seller Willing to Finance with 30% Down: $172,500

HELOC Availability: $220,000

Appraised 6/2016: $575,000

2013-2016: $200,000 in Renovation, proven with Tax Return

I was hoping to use the HELOC for a down payment. Are there any loans out there that would help me purchase this?

Hi Marcel,

So for me it all depends on your cash on cash returns. So with all the money invested in real estate and lack of equity personally I want an investment where I get a higher return than the stock market. Personally I aim for 12%-15% whereas if I left the money in the stock market it would give you a return of 8%-10%. Hope this helps.

So in my opinion real estate is a game where you want to own as many "doors" as possible with as little money down as possible. Its a game of leverage where you are trying to invest the least amount of money and get a return. Lets use an example below: Assumption Buying Price $100,000 Rental Income: $1,000

Scenario 1: Bank Loan 20% Down: $20,000 so with a rental income of $1,000 and $20,000 down our return would be 5%

or

Scenario 2: Seller Financing 5% Down: $5,000 so with rental income of $1,000 and $5,000 down our return would be 20%.

Now these are based on EXTREMELY SIMPLISTIC Assumptions we did not include tax, maintenance, etc. But it gets the point across with a minimum down payment our returns are a difference of 5-20% depending on how much money you put down.

Hi Tyler, I just did my first ever personal commercial property, more out of necessity than investment. Would love to talk to you more about how to run a commercial property. Do you own and run yourself? or have management take care of all this?

These terms are both important in real estate. Not knowing these terms would mean that others won't take you seriously. Getting into the game you have to start speaking the language so that other will know what others are talking about. Best of luck!!

Thanks Eric. I will revise my plan a bit more to to maybe make it more presentable to the banks.

Smoker aren't a protected class. Thus you don't have to rent to them if you don't want.

Agree with Brett. Find out if its worth all the cost, also commercial usually takes longer than residential to rent out thus can you handle no cash flow for a extended period of time?