All Forum Posts by: Tayvion Payton

I’m considering amulti-family property in the 76104 zip code of Fort Worth, TX, and I’d love your feedback to help determine if this is a good deal.

Property Details

Asking Price: $169,999 (seller says it’s negotiable).

Current Rental Income: $2,400/month (duplex is vacant).

Configuration: Combination of duplex and triplex units. Some units are rented at below-market rates.The duplex and need rehab.

Historical Income: Seller claims it previously brought in $5,000/month when fully occupied.

Condition

Built in 1934, so it’s an older property.

Some permits were recently pulled (e.g., plumbing, window replacements, and sheetrock repairs), but it still needs work to get the vacant units ready to rent.

It’s located in a neighborhood with a higher crime rate but also near major highways and areas with rental demand (e.g., downtown Fort Worth and Texas Christian University).

My Goal:

I’m focused on cash flow, and this property seems like it could work if I can stabilize it. However, I’m not sure how to accurately determine its value, given the configuration and the fact that it’s not fully rented.

My Concerns:

1. Determining Value: How should I calculate the fair market value for this type of property? (It’s multi-family but not entirely stabilized.)
2. Rehab Costs: How much should I budget for bringing vacant units to market-ready condition?
3. Crime and Tenant Quality: With the higher crime rate in 76104, how much impact could this have on tenant retention and turnover?
4. Rental Market Trends: Is this zip code trending positively for investors looking for cash flow, or should I expect stagnant rents and challenges with appreciation?
5. Negotiating Price: What’s a reasonable offer given the current income and potential for more?

I’d appreciate any advice, especially from folks who have invested in Fort Worth or similar areas. Does this sound like a deal worth pursuing for cash flow?

@Greg Kasmer i have not, im a new investor in the commercial and assumed due to my lack of experience it would be an issue

@Bruce Lynn Yes, I am finding out that commercial loans are not as easy as people make it out to be. After actually, analyzing and figuring some of the things out. I think 2-4 units may better suit me at the moment until I am a bit more experienced. I will still be on my radar, but i think small multi-families would be a bit easier for me to acquire. 

Personally, house hacking is not for me. It's not a strategy I am willing to explore.

@Karolina Powell no problem. i'm glad that you were able to get something out of it 

Hey everyone,

I'm evaluating a multi-family deal and could really use your insight. The seller is offering seller financing at 2% interest with a 9-year balloon. On the surface, the deal seems appealing, but there's a catch: the asking price is $475,000, which is about 18% over the market value (based on comps and DealCheck estimates around $402,000).

Details of the Deal

• Property: Duplex, 2,400 sq. ft.,
  
• Purchase Price: $475,000 ($197.9/sq. ft.).
• Estimated Market Value: $402,000 ($168/sq. ft.).
• Financing Terms: 2% interest rate, with a 9-year balloon.
• Unit B Income: $2,049/month (Section 8 tenant through November 2025).
• Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.
• Monthly Loan Payment (P+I): $1,386.
• Cash Flow Breakdown (if both units are rented at $2,049/month):
  • Gross Rent: $4,098/month.
  • Vacancy (10%): $410/month.
  • Operating Expenses (37.3%): $1,376/month.
  • Net Cash Flow: $943/month.

Key Questions

1. Would you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?
2. How much weight do you give to the cash flow benefit of cheap debt when the property is priced above market?
3. Would the 9-year balloon concern you, knowing you'd need to refinance or pay off the balance at potentially higher market rates in the future?

I like the cash flow and see the potential for increasing rents, but I’m hesitant about overpaying. I’m considering countering with a price closer to the market value, but I’m curious how others approach deals like this.

Looking forward to hearing your thoughts! Would you jump on this, or is the premium too steep?

Thanks in advance for your input!

Hey everyone,

I'm evaluating a multi-family deal and could really use your insight. The seller is offering seller financing at 2% interest with a 9-year balloon. On the surface, the deal seems appealing, but there's a catch: the asking price is $475,000, which is about 18% over the market value (based on comps and DealCheck estimates around $402,000).

Details of the Deal

• Property: Duplex, 2,400 sq. ft.,
  
• Purchase Price: $475,000 ($197.9/sq. ft.).
• Estimated Market Value: $402,000 ($168/sq. ft.).
• Financing Terms: 2% interest rate, with a 9-year balloon.
• Unit B Income: $2,049/month (Section 8 tenant through November 2025).
• Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.
• Monthly Loan Payment (P+I): $1,386.
• Cash Flow Breakdown (if both units are rented at $2,049/month):
  • Gross Rent: $4,098/month.
  • Vacancy (10%): $410/month.
  • Operating Expenses (37.3%): $1,376/month.
  • Net Cash Flow: $943/month.

Key Questions

1. Would you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?
2. How much weight do you give to the cash flow benefit of cheap debt when the property is priced above market?
3. Would the 9-year balloon concern you, knowing you'd need to refinance or pay off the balance at potentially higher market rates in the future?

I like the cash flow and see the potential for increasing rents, but I’m hesitant about overpaying. I’m considering countering with a price closer to the market value, but I’m curious how others approach deals like this.

Looking forward to hearing your thoughts! Would you jump on this, or is the premium too steep?

Thanks in advance for your input!

@Jaycee Greene I wouldn't have the funds for the down payment. 

 Seller isn't budgeting on the 1.25M asking price. Property appraised for 1.6M. It was great analyzing the property, but I think I will pass on it. 

Thanks @Dominic Mazzarella

@Alex Olson the AS in cap rate is 9.59%