All Forum Posts by: Eric Davis

I've been looking at a couple of cheapo houses in the area around me. Most of the prices are under $50,000 and have had trouble finding a loan company that is even willing to fool with something so cheap. Is it a possibility to pick up a couple of properties and lump it all together in one loan? I can see this being a nightmare on the selling aspect but was just wondering an easier way than having to pay all cash for one property at a time.

What are some of the tricks that you guys use to pick up multiple properties at once?

We are currently looking for a lender for a Multi-Family loan. If you can offer 20% or less down payment, please PM with more details. We are located in Virginia.

I know there are tons and tons of internet calculators you could use to calculate the monthly payment of a loan but I'm looking for the actual formula that is used. Could someone please find this for me or at least explain a good rule of thumb.

I would just like to be able to quickly calculate what the monthly payment would be if I know the asking price. Thanks guys!

Mike, I see you have a book for sale. Do you go into how exactly to find these desperate sellers to begin with? If you would rather PM me, feel free. Thanks!!!!

Thanks for the responses guys. Both of you two have helped me out with all of your very helpful posts!

Mike, so it seems that since my NOI really will be around $3333 a month, then I need to subtract $100/unit to this to figure out my maximum monthly payment I can afford.

$3333
-$1300 (13 units)
---------

$2033

So this would be around what purchase price? I assume around $210,000? Would you investors even waste your time with such a discounted offer or is that just part of the numbers game? Or is it more time effective to just simply put an offer in with a due diligence clause?

Thanks again for everyone's insight.

Wheatie,

The number was the average rents for the last two years. If I did not take out the property management fee and vacancy it would be 80k for the gross rents.

I am testing the waters of commercial real estate and was wondering if anyone could look over the numbers I currently have available. Here is how I see the deal.

Asking Price- 600,000
# of units- 13

Gross Operating Income- 71,820
less
Taxes- 3087
Insurance- 2310
Repairs- 6875 (added 25% to estimated price, )
Utilities(common area)- 400
Misc(pest, snow,landscaping)-2300

Net Operating Income 56,848
less
Mortgage Payments 46,800

Cash Flow 10,048

Now I will not be offering $600,000 but really wanted to check with some of you experts to make sure I'm not forgetting anything. Also, since my cash on cash return is not stellar, should I just pick my percentage of return and just work backwards to figure out my max offer?

PS-I absolutely love this site.

I am having the hardest time deciding how to determine this number. I have read many different options but all seem to have their pitfalls.
The first one was simply taking your NOI/Cap rate. However, I'm not paying all cash so this doesn't work. I searched through this site and found an article talking about the "band of equity investment". This doesn't even factor in the cost of the property, so could someone explain to this rookie how to correctly figure out the maximum purchase price of a commercial property? :crazed:

I should say that I am looking for a multi-unit apartment complex (around 20-30 units).

Any reading material would also be great!

I guess I just need more experience with it. Estimating flooring, painting, cabinets, and general costs are easy. But with this scale I guess I will just have to try and round up a few contractors.

Also, besides looking at past rehab work, what are some simple ways to screen the contractors that do show up to give some quotes?

There is a road in my area that has a great rental market. On this same road there is also a big warehouse that is priced well below market value. If we decide to try and convert this into a business office, how would we \ estimate our rehab expenses? Is there a rule of thumb like the 50% rule to estimate this expense without having to drag people out with us everytime we would like to check a property out?