All Forum Posts by: Franklin Anderson

@Brian Burke thanks for your willingness to help. It is 5 units - 4 duplexes and 1 triplex (10 rentals) at 85% occupancy the rental income would be $95,880/yr. We would self manage the properties, utilities are paid by the tenant, and this area requires little to no advertising for tenants. All that being said If my math is correct I am still cash negative. Hate to let this go...what value would you put on the property to make this work? I am pretty sure the bank is willing to short sale.

I am working a 5 unit multifamily deal - 4 duplexes and 1 triplex. All units are currently occupied with the average tenant being there over 3 years. Current rent rates are slightly low and should be raised at each tenant turnover. I have been approved for financing at 80% LTV, 5%apr, 15yr term, 3yr refi/baloon. The owner is willing to sale the properties for payoff plus 2014 taxes $954,900 ($188k/ea plus $14,900 taxes). They are extremely well built units (all brick), needed known repairs will be new roofs within the next 3 years - estimated cost to be $20 - 25k. Last unit sold for $200k in 2013.

• Current rental income is $9,400/mnth $112,800yr, at 85% occupancy it drops to$7,990/mnth $95,880/yr.
• Combined yearly taxes are $14,900
• Estimated Insurance $5,000/yr
• Estimated Maintenance Cost $750/mnth $9,000/yr
• I will be required to pay all closing cost and appraisals - estimated $8 - 10k
• I will be required to put $60k down and use a current property to make up the remaining 20% down - which will be refinance.
• Loan amount will be $871,254, 5%apr 15yr am, 35 month maturity - $6890/month, $82,678/yr
• I am assuming no appreciation - loan balance in 5yrs if all goes well should be approx $615k, add the $60k down, possible sale for $940,000 = $265,000 equity

We currently own a small single family rental home and one owner occupied multitenant commercial property.  This is a big deal for us.  The biggest unanswered question her is appraised values - if the properties appraise below the payoff the bank may consider a shortsale at which time I feel the deal would look way more attractive.

My gut says the cash flow on this is too tight.  One big problem and we are out of pocket.  Would love to hear the more experienced investors advice on this.  All help is very appreciated.

Thanks to all of you for the warm welcome!  I am pretty amazed at the community of like minded people so willing to help each other succeed.  Looking forward to getting to know everyone!

Hi, My name is Franklin Anderson and I am new to BiggerPocket. I am currently working out of Jonesboro, GA. I am one of the owners of M.O. Inc., a commercial interior drywall and acoustical subcontracting company working all over the greater Atlanta, GA area. I am also partners in a small real estate investment company, Ason Enterprises LLC. My Father and I started the company 7 years ago to purchase a multi-tenant owner occupied commercial building. Since then we have only purchased one additional small single family home. I have also built two homes from the ground up - one spec home and my current home in Williamson, GA.

I consider myself new to real estate investing and am eager to grow our portfolio with both single family and multifamily rental properties.  I would also like to use my home building and commercial construction experience to try our hand at flipping a few properties this year.  

We are currently pursuing deals on the South side of Atlanta in Henry, Spalding, Pike, and Fayette counties.  Another area I am very interested in learning about is Walton County, FL along the Gulf Coast (Destin, Pananma City, Etc).  

I have so much to learn and am very excited to have found BiggerPockets.  I love the podcast the forums and the people - everyone seems so willing to help others learn.  Looking forward to making some great connections.

Thank you!