Posted by Ed Garcia on February 07, 2001 at 11:25:07:
John,
I’m sorry to say that you’re not giving us enough information here. I also feel that it’s obvious that one of the main components you’re missing is down payment. Now this can be compensated for by, seller carry-back, deal structuring, cross collateralizing, LTV based on which lender you use etc. At this point we haven’t even decided if you have a deal here.
John, with the limited information you’ve provided, I can only speak hypothetically and therefore would not be doing you justice. I think your question is, Can I purchase a sizeable acquisition with no money down? The answer is YES, depending.
If you want to pursue this deal? Then here are some fundamental questions we would need to have answered in order to help you analyze and structure your deal.
(1) Describe The Units and the surrounding area?
(2) How old are the units?
(3) What’s the unit mix ( how many 1 br. 2 br etc)
(4) What’s the vacancy factor in the area?
(5) What is the gross income of the units?
(6) What is the vacancy of the units?
(7) What is the NOI?
(8) What are market rents in the area?
(9) Are there any other Units in the area for sale?
(10) If so at what Price?
(11) What are the going Cap rates in the area on multiple units?
(12) Have any other Units in the area recently sold?
(13) If so at what price?
(14) How much does the seller owe on the units?
(15) If there is a loan, is it assumable?
(16) Will the seller carry a second?
(17) Is there any differed maintenance?
(18) If so, estimated cost of maintenance?
(19) How’s your credit?
Ed Garcia