All Forum Posts by: Leah Roberts

@Anthony Wick the seller said I could do a buy out 10 year buy out at a small premium if I was interested.... looking at this and breaking it down it seems to me I would be taking a hit on the two duplexes that would be under a land contract and would be making up for it with the ones financed conventionally.....  If your willing I have the pro forma I can send you...

@Anthony Wick I am working on financing the other part with the bank. The terms with the seller is he is selling at 280k with 25k down (less than 10% down) leaving me with 255 left at a 5.5% 20 year pay down term. The seller originally wanted to sell all 5 duplexes on a land contract with an asking price of 775k 20 year paydown at 6.5%. I think he wants to lock in some mailbox money as he just retired and wants to move out of state.

Thank you for your insights. I will have a lawyer take a look at the land contract. The land contract definitely helps in financing for me but I want to make sure that it doesn't come back on me in the future.

I am looking at my first "large" real estate investment. I have a seller who wants to sell 3 duplexes at 140K each where I would buy outright... finance with a bank either separately or all together on a commercial loan and 2 duplexes at 25K down at 5.5% for twenty years where he wants to do a land contract. Each duplex brings in about $1650 gross a month. The numbers look good but I am nervous I am missing something. I don't know much about land contracts and what would happen if something should happen to him/ or his loan. After running the figures it appears the whole $700k purchase of all 5 duplexes would cashflow $23K a year. Is there something I need to know before I get into a land contract? Running the numbers through biggerpockets calculator looks even better than the proforma he has given me. Has anyone dealt with a deal like this?

@Stephen Sloane This is the same dilemma I am in. I am currently working getting an appraiser license as well here in Michigan and I had a hard time finding someone to take me under their wing and teach me for the required hours. I resorted to cold calling appraisers in my area and found a guy. It took me over 20 phone calls. Still he appraises on a part-time basis so its a slow go. But I would suggest compiling a list and calling appraisers. Let them know that you will work on a split basis. Good luck to you.

Hi Biggerpockets community,

I am interested in a deal that is a 10 unit complex all side by side duplexes. 

Seller states: 

Owner will finance on a land contract amortized over 20 years with a $100,000 down payment. No banks or realtors involved! All units are leased and should show a positive cash flow from day one (Plus a $16,058 mortgage pay down for the 1st year growing each year thereafter) - estimated financials show:

Current Annual Rent $97,800
Interest Year 1 ($46,741). Property Taxes ($10,078, Insurance ($3,488)
= Gross Profit $36,953 Maintenance expense TBD depending on owner participation
Note - Mortgage Reduction 1st Year $16,057 

I am educated enough on land contracts. I understand it is seller financing. In this situation, would I be paying $46,741 plus the principle on the "loan"? It looks to me that the mortgage reduces each year so at the end it is paid off and there would not be a balloon payment. I am trying to determine how to analyze if this is a good deal or not. Any insight or thoughts?

@Terry Mclain çan you please send me more information. I purchased a duplex where the previous landlord had one tenant billing the other for water. I think submetering the water might be the best option. Thanks again!

@Bill F. Thank you for the insight. I saw that there is a company called guardian water & power that will do the billing for you for a small fee. I am definitely going to have to do my due diligence with these two tri-plexes. From what I can see getting the units officially split, is financially not feasible. 

Hi BP community,

I am looking at investing in two triplexes which were single family homes that were converted into triplexes. The only utility split three ways is the electric. The water and gas are still on one and the current landlord has the gas and water included in their rent. I want to get away from this. Has anyone had experience with this type of issue? Do I/ can I split the water and gas bill legally three ways between the tenants or is my only option to get the water and gas split three ways? I am starting to look into the cost of that and I think its going to be a pretty hefty price to pay.... Is it manageable to just split the bill three ways or am I asking for a headache?

Thanks in advance

Leah

@Trevor Daniel Thanks Trevor... I appreciate it. I’m still learning the area as I’m new to Michigan. Just moved here from Illinois. I am going to a MREI meeting tomorrow in Troy. Will you be there? If so let’s meet!