7-Unit Assumable: HELP! - Posted by Norm WA
Posted by Norm WA on March 21, 2001 at 23:51:25:
Looking for help or ideas…
There is a 7-unit offered at $175,000. Owner is changing jobs and can’t spend the time on the property. Has a remaining balance of $165,000 on an assumable mortgage. Property was appraised at $235,000!
Here’s the numbers:
Annual Scheduled Income: $30,900
Less 3% vacancy for this neighborhood: -$927
Less expenses: -$5275
Less Debt Service: (1850/mo) -$22,200
Estimated Cash Flow before taxes: $2498
Nothing earth shattering, but acceptable for a starter. His current mortgage interest rate is 9%. I SHOULD be able to refinance in a few months for LESS than that to increase the CASH FLOW, as well as gradually increase rents to market rate (which seem a little below currently).
I have NO capital for a down (a few thousand that might help with closing costs, that’s it). SO, I’m looking for suggestions on how to put together some kind of CREATIVE offer. I’m sure he will consider it because he sounded motivated on the phone about selling it.
Has anyone put together some kind of LEASE OPTION or LEASE to PURCHASE type offer before??? Thanks for any ideas.