Re: 100% Financing Deal: too good to be true - Posted by D
Posted by D on July 22, 2007 at 20:52:51:
Unfortunately, I do not have any operating statements from the seller. This was the sellerâ??s personal residence, not an investment property. The best that I’ve been able to do is to estimate rental rates and expenses to come up with a NOI that could be used toward debt service. The challenge seems to be that with a fully leveraged property, the income is eaten up by the debt service requirement.
On top of all of this, the seller wants retail. The seller does not have much equity. By selling retail, there is enough to cover all expenses for the transfer of ownership. Basically, it seems that if I can find a way to make the property sustain itself, then Iâ??ve got a good deal.
Another consideration is section 8. I believe that this would reduce the vacancy rate & collection delinquency rate variables. But, Iâ??m not sure. Most appliances are new and the property is in good shape. So, Iâ??m thinking that the maintenance rate is reduced. All and all, I just want to make sure that Iâ??m not â??tweakingâ?? the numbers to make it look better than it really is.