$1.59 Million deal. Can I do this? - Posted by dknj23
Posted by dknj23 on July 14, 2003 at 20:58:18:
Hi I know that this is a gigantic deal but I need to step up my investing to big boy level. Will anyone lend me this loan?
Property is a 9 unit multi family in a very hot part of NJ. It consists of 5 2bd/1 ba and 4 1bd/1ba. Very, very, very conservatively the 2bd will rent for $1400 and the 1bd $800.
Total rent roll is $14,400 a month
The yearly expense is approximately $20,500 or $1,710 monthly
The asking price on this building is $1.59 million.
Now I’m not sure what a commercial loan would go for but using a mortgage calculator I figured 0 down 6% 30 yr fixed for the full asking price of $1.59 million comes out to $9,540.
So rent $14,400 less expenses $1,710 less debt service $9,540 leaves net profit $3,150 a month.
If i factor 75% of rent than running the same numbers gives me -$450 a month.
The rent figure is already at the lowest end of the range.
I obviously do not make enough to afford this conventionally, make $52k yr and have excellent credit FICO 720. Have a monthly debt of $250 and that’s it.
I have two other properties that cash flow positive, minimal equity in them about $25,000 total.
1st property is cash flowing $340 and second is $220.
I will be able to get about $40,000 from my brother’s heloc that I can use if I need to put something down.
Am I dreaming too big right now or can this deal be done?
Thanks all for those that respond,