All Forum Posts by: Keerthi A.

Hoffman Estates.

Off of Golf Rd. It is around 3.5 miles from Woodfield mall.

Craigslist shows lowest 2-BHK unit at $1095 without water, heat. My figure at $975 is pretty conservative as this place has heat, garbage,water, etc included. At $1050 a month, cap rate crosses 15%.

It is move in ready. No repairs needed. Can you guys look at my numbers.
Purchase Price $38,500

Inspection $150

Attorney $500

HOA (6 Months) $1,698

Title Transfer & Insurance $1,000

Stamp and other costs $652

Total Price $42,500

Rent $975

Tax + HOA $362

Insurance $15

Vacancy (1 Month) $81

Maintainance $25

Total Expenses $484

Rent - Expenses $491

Annual Rent $5,896

Cap Rate 13.9%

If Financed 80% of LTV

Acquisition cost $42,500

Lender Fee $250

Appraisal $400

Other Costs $400

Total Borrowing cost $1,050

Appraised Value $40,000

Downpayment $10,500

Downpayment + Loan Cost $11,550

Loan Amount $32,000

Mortgage (3.5%/10Yr) $316

Hazard Insurance $15

Annual Bank Payments $3,977

Net Annual Cash Flow $1,919

Cash on Cash% 16.6%

@Tom Goans, I am already offering 10% above asking. So I expect bank to cover the HOA dues. I do want to take everything into account when I look at the numbers. I am not negotiating with HOA so I do not expect to shortchange them, I am working with the bank thats it. Either I am in the deal or out. Also I heard HOA dues are hard to negotiate, they sometimes have a hefty attorney fees.

Correction on my earlier post,10yr loan payment will be $305, not $343.

I got to ask my realtor to check up. Hoping FNMA picks up the tab for previous HOA dues. I just saw the remark on MLS so I still do not know the details. I will post once I find out.

HOA includes heat, water, parking, exterior maintainance, common insurance, etc.The numbers are standard.

Most important thing is the HOA allows renters. Most HOAs do not allow renters or have a 25% rental cap in my target areas. I do not want to have multiple illegal rentals.

Complex is at a major interesection. Cheapest rent in the area, rents are upwards of $1200 in other locations. Near to many offices, both white collar and blue collar jobs. I did talk to couple of renters here while I was trying to buy another place. Huge mall nearby. Also one of my acquantinaces has couple of units at this place and he haid there is a good maintainance guy also there, so remote maintainance easier.

I am going to finance the property later. Pay with cash and do a cash out refi. 10 yearat 3.5% for 80% LTV, $30,800 for $343 a month payment. $150-$200 cash flow after financing, 25+% return on downpayment (is it cash on cash%).

Area - Chicago NW Suburbs

16 Miles from my place.

2Bed/1Bath Apt

Looks Clean, Move-in Ready

Bid Price - 38,500

Asking Price - 35,000

Offer Accepted by Fannie Mae Today.

Previous Sale prices are around 40-45K avg. Zestimate - 62K

Potential Rent - $950-$1000

HOA - 280/Month

Tax - 950/yr

Tax+HOA - $360

Vacancy - $80

Maintainance - $25

Total Expenses - $465

Net Return - $485-$535

There is a six month HOA bill that I got to negotiate. Will know only tomorrow what that would be. Hoping it is 1500 max.

Inspection and Attorney would be 150 and 400-500 respectively.

If I can get the place for 41K is it worth it?

It is worth around 52K. But it had nicer floors, new laminate and a good vanity but no refridgerator, broken stove. All in all, worth around 55-56K.

There were two transactions this year one for 52K three months ago. Last year there was a unit sold for 36K. Cannot beleive the price.

By the way, they have 25% rental cap, which was hit recently so no more rentals, atleast legally.

By the way the 53K property closed today.

Guess the price - 74.5K. Nearly 40% above asking price.

Crazy market.

Hard to compete against such offers.

How do I win the bids? Will cash give me edge. If so, what kind of discount can I get with cash purchase.

Last time, I have tried to bid around 7% above asking on this particular building with low assements, I did not win the bid. Asking 53K, bid 58K finance unsuccesfully.

Now another unit has come up. Listed in Jan for 50K on MLS, but with some work needed. Then delisted.

It is coming back again. The problem is I have limited cash reserve around 50-54K and would like to use it for two properties, so do not want to spend my entire capital.

It might be under First Look program for 15 days and then I will have a chance to go at it. Good thing working for me is that rentals are capped and have hit the 25% limit. So investor demand might be little bit less. I am fine with this as I myself can move in or rent out the rooms to students seperately until the cap opens up.

Asssuming the asking price is 52K. Should I bid for 55K cash or 60K through finance.

Tax+HOA is around 300, rents are around 1000-1050.