12-unit, $700,000. What do I do now? - Posted by John (MI)

Posted by Houserookie on February 09, 2001 at 11:10:45:

Sorry Bill,

I went through a few posts here last nite and
came back to answer one or two.

This one is lost. Or maybe I’m lost.

12-unit, $700,000. What do I do now? - Posted by John (MI)

Posted by John (MI) on February 07, 2001 at 10:39:36:

In my paper, I see an ad for a 12-unit apartment complex (2 buildings). It says $699,500 L.C. Terms. It’s been on the market for a while, I’m told. How would one pursue this if one did not have any money to put down?

All this is irrelevant. - Posted by Jim Locker

Posted by Jim Locker on February 08, 2001 at 10:39:38:

There is absolutely no room for a meaningful discussion until/unless John tells us the numbers for the building.

Roughly speaking, to support that asking price, it has to be doing an absolute minimum of $100K gross per year. If it isn’t doing that, pass on it.

Personally, I would want to see closer to $120K before I would get interested.

Re: 12-unit, $700,000. What do I do now? - Posted by Robert MI

Posted by Robert MI on February 07, 2001 at 17:29:43:

im not sure about all the numbers but it looks like

  1. 699,500/12=58,291 per unit

  2. 699,500PV 10I 360N = 5628 (p&i only) with no money down.

need to find out more like how much does the seller want down? how long on the note. then add in all the other stuff like fix-up, mant. , managers ect.

If it has been listed for a while then he might be very flexible.

where in mi. do you live? im just outside of ann arbor and i have been looking for # unit.

let me know.
Robert mi.

Why forget it??? - Posted by Hugh James

Posted by Hugh James on February 07, 2001 at 14:04:34:

You don’t really tell us anything about the deal other than the number of units and the asking price. I get the feeling this may be your first foray into a mul;ti-family property. I’ll assume you’re not a complete newbie, and that you can make the necessary calls and run some basic numbers. If the deal looks intersting, and your concern is down payment, then you have a number of options including selling financing or carry back, partnering, etc.

In any event, I wouldn’t just blow the deal off until I’d made some effort. You might also want to refer this to the commercial board.

Forget it. (NT) - Posted by Bill

Posted by Bill on February 07, 2001 at 11:07:46:


Re: Why forget it??? - Posted by Bill

Posted by Bill on February 08, 2001 at 09:01:58:

Because, unless you have something to contribute like a giant, unencumbered salary, a rich uncle, large note on another property, or a couple of f & c new lexus 400 automobiles, you probably arent going to be able to leverage your way into this size of property and then be able to make the monthly strokes.

Although, if the property is aligatoring the present owner to death, he may just wrap it 100% for you just to get free of the thing. Then, unless you have the resourses to feed it, you are going to be up to your a** in the same swamp with him.

You can bang out the numbers on your computer as much as you like, but at the end of the day, to comfortably get into a property of this size, you need a few resourses to draw on.

Crawl, then walk, then run.

Good Luck

Re: Why forget it??? - Posted by Hugh James

Posted by Hugh James on February 08, 2001 at 10:08:12:

I can’t agree with much you’ve said. In any event, I think folks who post a legitimate request for information are entitled to something more than a flipant two word response. I do agree there wasn’t much to go on from the original post. And this guy may (or may not) be in over his head. But worst case scenario is that this is a learning experience for him. I just think that, bottom line, people, especially beginners, are entitled to some hope for their success.

Your response reminds me of the old story of the bumble bee. Aerodynamically speaking, it’s impossible for the bumble bee to fly. The bee doesn’t know that, however, so he just flys anyway. I have to wonder how many people who got their start in real estate on this board were told from any number of others to “forget it”, but they didn’t listen, and just flew anyway.

Re: Why forget it??? - Posted by Bill

Posted by Bill on February 09, 2001 at 24:13:34:

I agree with you, I may have been flipant with my first response, and for that I apologize.

However, the fact remains that unless a person has a few resources to draw upon, nailing down a deal like this is highly unlikely regardless of his aerodynamics.

This board abounds with creative people and there might be someone here who could make a deal like this fly. However, you and I seem to be the only ones responding to his post.

If this real estate thing were easy, everybody would be doing it.

Re: Why forget it??? - Posted by houserookie

Posted by houserookie on February 09, 2001 at 01:14:05:


REal estate is a business. Not just a way to make
money. Some people are just not made to be in
business. Or maybe they were made to be great
employees that excel fast in a corporate
environment. Perhaps a future millionaire as a
window cleaner.

It sounds rather crazy, but I do know people that
make a lot of money in thier own cleaning businesses.

Some have the ability to learn faster than others. Some have deeper conviction to success. The same is true when u compare teachers or carpenters.

Real estate isn’t for everyone. Owning a business
isn’t for everyone.

Although everyone should.

IN my case, I have spent much time learning the ropes
with note purchasing. Having done that, I have
resources to close deals that others can only
criticize. Yes even those on this board.

They have not done it so I am me wrong. Gee wiz…
that’s smart.

When I first jumped into notes, alot of inside
experts tried to confuse the matter by makign it
more complicated than needs to be. They use
terms and lingo to confuse the living spell out of me.

Alot of courses out there will do the same. They
show value by givng useless details. Pages and pages
of useless junk.

The bottom line is YOU. How you interpret facts. How
you handle criticsm. Whether you think going out
on Friday nite has greater importance than
staying home and reading “rich dad poor dad” or learning how to market homes, or how to structure
an owner financed notes and selling at closing.

I find it difficult to teach newbies in ten minutes
what took me months and years to learn.

I like to point people into the right direction,
but most prefer me to do things for them.

That I don’t do …

Re: Why forget it??? - Posted by Bill

Posted by Bill on February 09, 2001 at 08:56:15:


Forgive me, but I have no idea what you just said or how it relates to this topic.