All Forum Posts by: Blake Ziegler

@Matthew Saskin, To clairfy, you look for a minimum of $100/door/month of cash flow after reserves and debt service?

Also, the interesting thing about these SFH is that they are row-homes and cost half of what a duplex is. In your opinion, does that change how you would view these properties?

Thanks.

 @Kevin B,

Thanks for explaining that for me. That seems like a reasonable plan.  I also appreciate the disclaimer at the end.    BP members are awesome!

 @Keith H.

That's what he said the reason for selling is.  I find it hard to believe as well so that is still a concern of mine. I know my college bills didn't cost that much.

 @Matthew Saskin,

Thanks for your clarification on some of the numbers. In the spreadsheet that I have for these properties, there was a 5% vacancy figured in to the numbers. I increased it to 10% and it is returning a NOI of $32,000 before reserves and Debt svc.

At $100/door/month for repairs and debt service, it brings the annual cash flow to $3,600.

When you look at it like that it does seam like a weak investment. 

@Kevin Bellavance,  

I only have approximately 10K in available funds. 

BP Members,

I'm looking to dive in to real estate investing and came across an interesting portfolio that is being liquidated. The portfolio consists of 6 SFH's and 1 Duplex. All of the utilities are being paid in full at all properties with the exception of 3 units where the owner is paying water/trash/sewer and 1 owners meter electric bill. All the properties have been rehabbed with in the last 3 years. It is currently managed by a local PM company and the current owner is very satisfied with their performance.

The properties are located within 40 minutes of where I live and I would continue to use the current PM company if all goes well. The PM company deals with collections, repairs, evictions, etc.  The vacancy rate is currently under 10%.

The responsibilities of the current owners is just paying the bills.

I am looking for creative ways to acquire this portfolio but have little cash funds available because I just purchased my personal home 4 months ago on an 20% down, 15yr fixed mortgage.

Here are the numbers on the portfolio:

• Gross Rent: $65,000
• Annual Operating Expenses: $26,750
  
  • Management Fee: 10% of collections
  • Annual maintenance: ~$3,500
  • Annual Operations: ~$3,750
  • Annual Taxed/Ins: ~$13,500
• NOI before reserves and Debt svc: $35,000

The current owner is liquidating the portfolio to pay for a child's college. Asking price is $275,000.

Now for the financing ideas:

• I don't have  anywhere close to the 25% down that a typical investment loan requires.
• Will a bank view this as a "company" loan and see that it is making money and the management of the portfolio isn't going to change?  Only change of ownership will change.  If so, how do I go about asking for that type of loan.
• Seller financing is an option but doubtful because the owner wants out.  Maybe the properties could be acquired one at a time as they to pay for the college bills.
• What about hard money lender, still kinda new to that. 
• Find a partner to put the down money and then buy them out as it cash flows.

• Or is this just a bad idea and doesn't cash flow enough to make it worth it?