Businesses that has more money to lose, has more money to pay, is too scared to do to the other side (hiring unlicensed contractors), simply because they don't want to pay more once a person breaks their arm or falls from a ladder during their time there.

Interested to hear feedback from the community:16 units (Two 8-Plexes)Purchase Price: $450,000Closing Costs: $30,000 (this seems high, but I'm assuming includes sponor's fee)Total Price: $480,000ASSUMPTIONSAnnual Rent Increase Assumptions: 2%Annual Operating Expense Increase: 2%INCOMERental Income: $9,500/moVacancy Loss: $903 (9.5%)-----------------------------------Gross Income: $8,596/mo ($103,170/yr)EXPENSESProperty Taxes: $452/mo ($5,434/yr)Insurance: $375/mo ($4,500/yr)Utilities: $1,200/mo ($14,400/yr - hoping there may be a way around this, but I think included utilities are standard in this market)Maintenance & Cap-Ex (15%): $1,425/mo ($17,100/yr)Property Management (8%): $687/mo ($8,254/yr) --------------------------------------------------------------Total Expenses: $4,140/mo (49,687/yr)Expenses as % of Gross Income: 53.09% (numbers seem reasonable, but % seems a tad low; I've heard multi-family is usually around 60%)Net Operating Income (NOI): $4,456/mo ($53,483/yr)CASHFLOWNOI: $4,456/moMortgage (25% down, 5/20 ARM, 5% interest): $2,227/moTotal Cash Flow: $2,229/moEQUITY ACCRUED: $10,082/Year 1TOTAL RETURN: $36,837/Year 1TOTAL ROI: 20.68%CASH-ON-CASH RETURN: 15.02%The return figures include the sponsor's/syndicator's equity stake and PM fees. 

Maybe 15 years ago a typical retail home-buyer would have gone "oh it's a portfolio ARM with a higher rate, and multiple points up-front, no big deal, let's do it!"

Example--- 11,995 down includes  all ATT. fees  1,990 month includes taxes and insurance( ARM and HELOC) 298,000 with 23 years left on the loan.

Suburbs so safety and location are not red flags you already have taken location in to consideration.2) Financing!

After giving her my financial details and a initial plan I believe I should be a go for a 5/5 arm commercial loan on a 20 year note with an attached construction loan if needed.

•The terms of our operating agreement (including the Manager’s rights and obligations and the compensation payable to our Manager and its affiliates) were not negotiated at arm’s length.

They genuinely want to teach and help you grow as an investor and memberships won't cost you an arm and a leg.

But, there is such a thing as financial obsolescence, which essentially means that in order to do a proper rehab you'd have to spend an amount which is not supported in the ARM valuation, meaning - you'll never get this money back.

Once you've addressed all the safety issues, focus on rehab items that bring value, rather than perfection.