I'm a first time investor, about 40 years old, looking to take over a family property. Property is worth about 600k market value. We feel good about this as it almost sold awhile ago for this exact amount and has been appraised around this as well.
I'm in the unusual position of being able get financing from a private lender. It's a 12 year term with a 4.75% interest rate with $175,000 down. Which in this market is very good. Only problem is with a short term my monthly mortgage payment will be 2K, and will cut deep into my cashflow during that time.
With a little work I can get my COC to 3.1% per month for that 12 years.
Appreciation is about average in this area and I expect to get about 4% annually maybe 5%. All told the property would be worth about 800k when its paid off.
I can expect to get about $4,500 gross from the property with an NOI of $2,500 monthly (would be about $3,100 with inflation at that time). In other words once that mortgage is paid off I would be getting about $30,000 a year
It's just leading up to that my cash on cash is very poor. Is this a deal worth considering?
One final note, this property has a lot of potential for value add opportunities as its located right on a major highway and is 2 acres. We could easily put in a ministorage down the road or some other high caprate investment.
