All Forum Posts by: Account Closed

I had the same problem.  Your best bet is to contact the larger banks.  Wells Fargo currently has a good deal.  For loans below 750K, they pay the 1% origination fee, they pay appraisal and title.

I got 15y fixed term for 5.66% and 10y fixed, 25y term, 5.97%.  Commercial loans

This would be my first RE investment.  Long time researcher here on BP.

With 900 purchase and 180K gross rent per year (100% occupied), I was hoping for much better CoC (20-25%) but when I plugged in all the recommended % ages the CoC dropped to 8%.

Following are real numbers, taxes are high (spoken to county appraiser and tax collector), insurance is high as well, mantainance and cap ex is used from NAA 2016 survey (6.4% and 9% for garden style complex):

http://www.naahq.org/sites/default/files/naa-docum...

Also did itemized capex calculation for roof, parking lot etc + each unit with life span etc.  9% capex of gross rent and itemized almost align.

Commercial loan terms are with wells fargo for a 25 term loan, 10 years fixed and then refinance.

I am a bit concerned about commercial loan not having longer term and fixed rate, also higher interest rate.

I will create an LLC, have property damage, Liability and Umbrella insurance to protect myself.

Is the property management fair at 10%?

Should I worry about plumbing, electrical costs that might come up over the course as they are not upgraded?

Roofs are new, appliances are within 5 years.

How should I carry out inspections?  Read most of the posts but the cost seems very high for 28 units.

Anything else I should consider?

Bank of america, conventional mortgage. 4.25% for SFH (investment) and 4.625 for multifamily (investment). This is not a verbal quote but at actual based on paperwork.

 Unfortunately no.  its an out of state deal for me.  Thats why I have to get a property manager.

Thats another reason I was leaning towards this deal as its low maintenance + the payments are done online via direct deposit against manual collection for the 50k properties I looked at (B- C neighborhood).

 Yes.  I will put 25% downpayment about 110k.  Since its a 4 unit I will get conventional loan @ 4.625%

Thanks!  The schools are descent.  Rated 7 on greatschools.com.  I would say its a B+ neighborhood, not an A.  But the surrounding area is getting developed pretty quickly with high end amenities.  

Taxes are almost 3% :(

Hi all,

I am super tempted to invest in a under construction 4plex.  It will be completed in 100-120 days after booking (10k refundable reservation).  Each unit is 3 bed/2 bath.

Price:  450K < price includes granite counter tops, all appliances, sod in backyard, front yard

Rent: 1200/unit (4800 total) < confirmed with local property manager after running CMA

PITI: 3000 per month (PI: 1700, Tax:1050, Insurance: 250: yes taxes are super high)

Prop Management: 400/month

Maintenance/Capex: 400/month

Vacancy:  250/ month (5%)

Cash on Cash: 8%

First year maintenance is fully covered since its brand new

I know that the cash on cash is low but I also think that it might not need 400$/month to maintain at least for first 5-6 years.  

I am super tempted to invest in this over cheaper properties (50K a pop).  Cheaper properties have higher returns but not so sure about appreciation.  I think the area has potential to appreciate in value.  

Torn between the dilemma whether to go for a nicer, low maintenance property with lower returns or cheaper with higher returns.

Thanks!

Currently I have maintainance at 0.5% annually and CapEx at 1% annually, total 1.5% kept aside (of the property value). I arrived at this numbers from the history of the property (about 1000$ average yearly maintainance for past few years) and secondly form some research.

But you are right, there is no good number, maximum I can bump up is to 2%.  After that the numbers dont make much sense : Roughly 500/month.  Then cash on cash becomes 14% with 170$ per door.

Hi all,

I am interested in a deal where there are 5 single family homes as a package.  Fully rented.  All are in good condition, rehabbed (fully gutted) about 3-5 years ago.

This would be my first deal getting into rental investing in US.  

Purchase price: 270k

Currently rented for: 3500/month

Expenses: 600/month (taxes, insurance, utilities < water for one unit)

Prop Mgt: 300/month 

Maintainance: 120/month

CapEx/Rainy day: 230/month

Vacancy: 175/ month (5%)

Debt service:  1090/ month (@5% interest)

Total:  2500 (approx)

Cash Flow:  1000/month (200 per door)

Downpayment: 70k (25%)

Cash on Cash: 17%

What are the downsides of such a package against a multifamily unit?

Finance:

I will have to go with a commercial loan.  Since there is a limit of 4 total houses in getting conventional loan, would this commercial loan of 5 units close doors on me for getting conventional loans for my future acquisitions?

Hi all,

I am interested in a deal where there are 5 single family homes as a package.  Fully rented.  All are in good condition, rehabbed (fully gutted) about 3-5 years ago.

This would be my first deal getting into rental investing in US.  

Purchase price: 270k

Currently rented for: 3500/month

Expenses: 600/month (taxes, insurance, utilities < water for one unit)

Prop Mgt: 300/month 

Maintainance: 120/month

CapEx/Rainy day: 230/month

Vacancy: 175/ month (5%)

Debt service:  1090/ month (@5% interest)

Total:  2500 (approx)

Cash Flow:  1000/month (200 per door)

Downpayment: 70k (25%)

Cash on Cash: 17%

What are the downsides of such a package against a multifamily unit?

Finance:

I will have to go with a commercial loan.  Since there is a limit of 4 total houses in getting conventional loan, would this commercial loan of 5 units close doors on me for getting conventional loans for my future acquisitions?