All Forum Posts by: Michael Cosstephens

 Thanks for this Dan. After some feedback here (yours included) and some additional calculations I agree that the deal was not going to work as a rental opportunity at those numbers. I am working on getting the number lower and also I am not interested in taking all 5 anymore due to some insane foundation issues on one of the houses. Flipping them is the easy way out for me. I have done that many times in the past. I am trying to step into the buy and hold phase of my life, just hesitant. This is new territory for me. 

Thanks again!

 I mean they are willing to do seller finance. I can probably lock them up over time.. I researched the loan you referenced and I agree that might work. 

Does your group work with people in Ohio or is that to far out? I am working on renegotiating this deal. We did walk throughs on the houses today and they are going to need a lot of TLC, but that is well within my ability. I have done dozens of flips. I just thought maybe I should buckle down and try to have some rentals so that I could exchange these for something int he commercial space later down the road. The challenge for me is that I am self employed so its hard to get the banks to take a risk on me due to how I have done my taxes the last few years. Lean and Mean

 Yes this makes sense, but Im not sure what lender would be willing to make a deal like this based on what I have gone through for the last few weeks of discussions with some of them.

You are correct 3 of them are lower end units, 2 of them are larger units but still not in the best neighborhood that is for sure. I had a meeting with them today and told them that I do not think we can get the deal done for there proposed offer. I may just purchase 2 or 3 of them with intent to flip. Being a land lord still stresses me out. 

Im gonna sleep on it. 

Currently looking at a deal that includes 2 duplex and 3 SFH. Old man died and the wife wants to sell the portfolio. Columbus, Ohio market

Currently the asking price for all the structures is roughly $700,000. The ARV on all of them is around $1.3M I am a general contractors and have done about 6 Flips over the last few years, so this would be my first stab at having rentals.

I have estimated that it will take about $150,000 to rehab them all over the next 2 years. They currently have long term renters that have been in the properties for over 10 years well below market rents.

Current rents are around $4000 per Month. Market Rents would be around $7000 (conservative Estimate) 

I have the comps, Iv dug through the deal for hours each night trying to find an issue, but my limited experience leaves me staring at the screen with no real direction

Finance proposal is this

$400,000 HELOC from my primary residence at 10% (broker deal)

$300,000 Seller Finance at 5% for 5 years based on 20 year schedule. Monthly payments until month 60 then pay the deal off.

This will leave me with about $100k in the bank of working capitol to upgrade the houses and have a safety net for something that goes wrong.

The question is will this thing cash flow? Can I get on top of this in year 2 or 3 and get these large debts paid down or refi so Its digestable.

The $700k in loans with these terms are going to swallow up all the $ early on from what I can tell, but then again I really cant see the finish line. Everyone I speak to says this is a great deal, but they also have limited experience.

If I need to offer more info I am happy to do so.