All Forum Posts by: Nathan Lefevre

Quote from @Greg Scott:

It is near impossible to assess whether this is a good deal or a bad deal based on what is here.  I'd need to see the entire pro-forma, including rent assumptions an line-item expense assumptions.

Here are a few general reactions

 - Based on your data, this is a 5% Cap Rate.  If both you and the property are in CA, on the surface, this looks like a good deal

 - The seller's expense ratio does not seem realistic.  Build a bottom-up model of expenses.  If you find expenses should be much greater than $108K, then the 5% Cap Rate is garbage.

 Thank you for your response and agree you would need more info. Attached is additional info I can provide for further analysis.

General reactions:

- That is correct, I am in orange county and the deal is in Santa Ana Ca.

-You are correct on that assumption. The seller is based in LA (approx 1hr) away from the property and self-manages the property.

Hi everyone! This is my first post and would love some feedback on a property I am going for.

I have been going back with the agent and he has given me this information regarding the existing loan terms:

Recourse

7-year fixed with 3 years IO

Roughly 2 years of IO remaining

Rate: 3.35%

Current payment: $6,840 per month IO

Starting year 4 payments will be P&I: $10,797

The loan is due in 30 years

After the fixed period the loan adjusts every 6 months based on 6 month LIBOR + 2.50%

Max 1st adjustment is 3% and max subsequent adjustments is 1%.

Loan Principal: $2,506,000

Basic metrics: EGI: $315,235

Expenses: $108,000

NOI: $207,235

Listed at around a 5 cap. 

Seller is apt to selling around $4.1M wanting 40% down. 

Improved metrics: Believe with RUBS in place and increasing loss to lease and rents to $1,800 from $1,600 is achievable making the NOI: $246,000 (roughly) with a cash on cash return just below 10%.

Please let me know what anyone thinks. I have not done an assumable loan and in this market that rate is enticing.