Hi @Account Closed
No expert here but here is my though process on this...
first some quick conservative math, assuming you pay the full 100k and take a high interest (10%) rate investment loan (lumping in 60k for rehab, evictions, and some marketing) perhaps even private money.
MONTHLY INCOME
Rent: $600 x 12 = $7,200
MONTHLY EXPENSES
Mortgage: $1,400
Vacancy: $120
Repairs, Maintenance: $200
Property Manager: $400 (guessing here)
Total Expenses: $2,120
This leaves $5,080 per month in cash flow....
Whoa, are all your numbers right? If so maybe it is just the deal of a lifetime... So let's say all those estimates are 2x off because of factors currently unaccounted for.
$2960 /mo cash flow ....
Even if you only used half of that to pay down the loan you would own the property free and clear in 6 years.
So to answer your question if I wanted to put zero cash into it I would find a partner who would put all the money into it and let me take care of all the legwork and headache then split the profits with my partner 50/50 and we would both be making a killing at the end of the day.
Or, I would find some bank that would give me a loan even if the interest was high and work out the math I did above again to ensure it makes sense once all the numbers are evident. I would get private money for the rehab at a set interest rate then refinance the entire thing under one loan once renovations are complete to bring down the rate if possible.
If those numbers are right it would be hard not to make money. I would try to negotiate with the sellers but wouldn't get greedy, try to be the answer to their problem and give them a very attractive solution.
This is assuming all the research checks out and the probability of renting the units is good. Is it in winter haven? Seems like it wouldn't be that difficult to rent in that location... But again, I am not an expert.
-Keith
