All Forum Posts by: Stuart Birdsong

@loganhassinger

It does, Thanks

@loganhassinger

Would you say that it is too small for a CAP Rate to be relevant? I would like to know more. Thanks

@eddiequispe

It seems like there are very narrow margins on this deal. From the numbers you have given, It is currently a 6.7 CAP and about a 4.5% Cash on cash. Even if you negotiated the deal down to 350,000, it be a mid 7 CAP and 7% cash on cash.

Given that you know your market, are there better returns to be found in multiple single family properties or commercial property? 

@preciousthompson,

    I have rented to friends in the past, and would advise against it. While you may know and trust them, they are typically the renters, that are most likely to push the envelope with you. After 1 experience I have a no friends and family rental policy unless they are dire need.

@Javierosuna

    I think you pose a good questions. While I have done a few wholesale deals, I would not consider myself an expert. However, I think this question relates to some of the fundamentals of taking a property under contract. I have a couple of questions, before I think I could provide some insight

1- Have you agreed to an Earnest Money Deposit with the seller? 

2-Is this a great deal? If so, Why would the potential buyer consider backing out? If it's not a great deal, what was the basis for putting the property under contract? 

Thanks!

Hey BPers!

   Does anyone  have a good recommendation for Attorney specializing in Investment Real Estate in Colorado? Thanks for your help!

Hi @jessicasheppard,

     It sounds like you have an interesting deal in front of you. Given that I don't know your market at all, I would take a step back and try to assess the risks with taking on a Subject-to investment. First, I would do some research on the Due-on-sale clause. Make sure you completely understand what the ramifications of this are. The biggest concern in this purchase is, not necessarily the cash flow analysis, but more the overall debt to value ratios. If the actual value is less than the current debt, and the bank calls the note due ( as you are not the person named to the note or assumed the note, legally) you are going to have a hard time being able to service the debt, unless you have the liquidity. More importantly, your ratios will be such that it will be even harder to find private funding to cure the debt. 

     In the case that you do proceed with this transaction (which I would recommend against), hire a Lawyer that is experienced in this specific type of deal, as they will provide all the important documentation to protect you moving forward. I would not do a  subject to deal without the advise of a Real Estate Lawyer capable of understanding it. 

Cheers!