Posted by Chris Cambridge on May 29, 2007 at 16:39:25:
This deal may work well with downpayment assistance if the appraisal comes in at $2.45 mil.
Down Payment Help!!! - Apt. Bldg - Posted by Hart
Posted by Hart on May 17, 2007 at 19:17:44:
My partner and I are under contract on an apt. building purchase (~40 units). The purchase price is ~$2mil. The buildings have just been completely remodeled, cash flow is good (can be improved w/ increased rents), and I believe the appraisal will come in close to the sale price - perhaps 5-10% higher.
The seller has agreed to carry a note for 15%. We can bring the 5% + acquisition costs. I’ve been working with a broker who has understood these variables and was very confident that he could get us attractive terms and a rate under 7% - which is the kind of rate that I’d want for comfortable cash flow. It’s now become clear that some of his optimistic assumptions were based on the hope that the seller would be willing to do some “funky” things regarding his portion of the financing. Now I’m not so confident that he can deliver.
He has found some lenders willing to do the deal if we can come up with 10%, which would require another 100K from us. Can someone out there PLEASE offer some suggestions that I may not have thought of for coming up with this cash!? I could take out an equity line on my primary residence for SOME of the total.
On a related note. We know some people with the kind of cash we need. Do you think this kind of financing proposal would sound attractive to someone:
~50K loan, 8% rate, int. only monthly pyments, initial investment paid back in 36 months. Obviously we’d be targeting someone who has that cash sitting in a savings acct/money market and would be interested in a better return.
Anybody’s help would be GREATLY APPRECIATED!