All Forum Posts by: Mark Williams

I've been reading up on Subject-To sales and they sound good on the surface, but I have a couple questions:

1. If I buy someone's house and take over their mortgage payments, they have to move somewhere else, but the mortgage debt is still in their name, so the chances of them qualifying for a new home loan are really low. So what do they do? Rent?

2. How do you go about getting home insurance on a Subject-To property?

3. If the Title is transferred into my name after closing, the bank on record isn't notified of the Title transfer?

Thanks for your help on these questions.

Don,

This area is really too small for the REIT's to come in, so the chances of that happening are really small. If I were looking in a bigger market that may be a concern, but in the sticks, I don't see Extra Space building across the road.

I'm looking at my first self-storage facility. 20,000 Square Feet, and they are asking 1.2M with a stated NOI of $82,000.

I'm probably looking at $300K for the down payment which I would have to raise. This place isn't making a ton of money and I've never dealt with other investors before. What kind of terms are people looking for when they invest in Self Storage? Will this place cover the debt service and pay back investors in the allotted time? Let's say I get 3 investors who come with $100,000 each to close on the property. How long are they typically interested in being in the property? 2 years, 5 years? $53,000 of that $82,000 goes to debt service, leaving $30K/year. At that rate, it takes 10 years to pay back the initial investment, and that is taking Zero out of the property for 10 years. I guess you could sell it after 5 years and payout the balances then... I am still not seeing where I could use any of this cashflow toward helping my bottom line. What am I missing?

@Denis M Thank you. That is what I was thinking about. I was just wondering what terms would make sense.

@Jason medhust Maybe im running the wrong numbers.  What kind of returns should I be looking for? 

There is a street in my neighborhood that has 6 duplexes on the market, all for the same per unit price, so it looks like 1 owner looking to liquidate. These units all appear to be at least partially rented. I would love to get them all at the same time. Any ideas on how to structure a creative deal, as I obviously cant afford to get 6 loans at the same time...

Hello,

I understand the 1% rule says that if you pay $100,000 for a property, it should rent for $1,000 a month to give you a decent return.

I am wondering how to determine what I should pay for duplex. Let's say I can get $700 a month per unit in this duplex. Using the 1% rule, that means $700x2=$1,400 per month, times 100%, that means I can pay $140,000 for the duplex.

A duplex I am currently looking at is listed for $64,000. The house looks like it is in good shape, on a street with a few other duplexes.

Am I missing something? Is this a stupid great deal? If it is, why is it still on the MLS?

Thank you Mike and Patrice. I do not have any existing relationships with brokers, as I am just starting in this area, but I am working on finding the movers and shakers in my market now. I am interested in moving into Multi-Family (24-36 unit apartment buildings) but I have much to learn. I know this type of property will help me build financial independence much quicker than SFH's, but I don't have the $ for the large down payments that these properties will require. Any tips on financing a 300K-400K deal when you don't have the required 20% down?

Thank you. I knew I wouldn't get an actual dollar amount. Your information is very helpful.

The broker should have a copy of the P&L statement, correct?

I have owned a couple single family rentals, and I am looking to make the move into smaller apartment buildings.

I have found a 24 unit building, and I am wondering what the average price per door I should be offering.

2 bed / 1 bath apartments go for about $650/MO. here in Michigan.