ED L@@K....please - Posted by jason

Posted by Ed Garcia on February 07, 2001 at 19:07:48:


I’m sorry I didn’t respond to you sooner, but sometimes I get so many post I get blinded and forget which ones I’ve answered.

Jason, the problem with your post is that you have told us about the properties that this man has available, but have not given us an individual breakdown of each property, for us to know what price we want to pay for each property. We know that we should get a good deal because we are making a bulk purchase, but again where should we start.

We don’t know if there are loans on each property, and if there is, how much etc?

We don’t know the condition of each property?

If there is work to be done, it has to be penciled into the deal, so we would need to know that?

We don’t know if the seller is willing to carry a second and if so how much on each property?

We don’t know how these properties relate geographically to one another?

Are they on the same street, same town, same city, same county, where?

You’ve seem to have grouped them together and created an income as a group, which is an incorrect method to use on this package, unless they are adjacent to one other.

Jason I can go on, but my point is you haven’t done your homework on each property. Remember Jason, if you sell them, you’re going to have to sell them individually, and so that’s how they should be analyzed. Yes it’s true, that sometimes you can purchase a package of properties so well, that you can go a little more on one because you made a killing on another, but I can’t feel that with your presentation.

We don’t know if your rents are above market, below market at market, what? You really haven’t given us any information about the market of each property.

Jason, I wish I had more time to spend on your deal because I can see that the old man is negotiable. But this deal is a little to complicated to work in a few posts, and you haven’t given us enough info.

Jason, here are the battery of questions I ask when I start to work a deal,

(1) Describe The surrounding area?
This question is to see if the subject property is conforming to the area.

(2) How old is the property?
(4) What’s the vacancy factor in the area?
(5) What is the gross income of the subject property?
(6) Why is the front building vacant and for how long ?
(7) What is the NOI?
(8) What are market rents in the area?
(9) Are there any other units or buildings in the area for sale?
(10) If so at what Price?
(11) What are the going Cap rates in the area on this type of property?
(12) Have any other properties of this type in the area recently sold?
(13) If so at what price?
(14) How much does the seller owe on the property?
(15) If there is a loan, is it assumable?
(16) Will the seller carry a second?
(17) We already know that there’s differed maintenance, what’s it going to cost to
fix up?

(19) How’s your credit?

Jason, your credit looks fine, but then again I don’t know how resourceful you are.

Jason, If you like, you can call me, and I’ll see if I can give you some guidance on your deal, my number is (909) 944-0199.

Ed Garcia

ED L@@K…please - Posted by jason

Posted by jason on February 05, 2001 at 10:50:08:

I know this is a repeat post but i only got one response so i thought i would try using the magic word. please??

I am looking for critical/viable suggestions and/or ideas to relieving a current landlord of a handful of properties and how to best structure this purchase. All properties are leased and tenants will be staying. My intent would be to hold as rentals for a minimum few years then possibly trade all or some toward a better income producing investment. here a the numbers that the seller has provided. I am fairly new to rei, but i have had a few rentals for a couple years and have a few deals under my belt. what is different here is that i would like to attempt a package deal. seller is willing to finance up to 20% to help out potential buyer.
my questions are how to structure a package deal and how to finance as a package if possible? also, with the numbers provided would the real dealmakers here at this site see a worthwhile deal?

here are the numbers:

  1. sfh: 3/1.5/ 2stry, brick,new roof,water heater,new paint in/out; all appliances stay. rented at 600 per month. taxes 140 yr. tenant pays all utils. 46k.

  2. duplex: 780 taxes, rented 900 per month total. 60k.

  3. triplex: each 2/1.5. tenants pay all utils. 1225 monthly rents. 1560 taxes. 103k.

  4. triplex: 1365 monthly rents. owner pays utils. 607 taxes. avg $250 utility bill. 62k.

  5. fourplex: tenants pay gas/elec. owner pays water. 1025 monthly rents. 607 taxes. 60k.

totals: 13 rentals. approx selling price 330k. total rents 5115.

shaving 40% for expenses (which seems high) leaves about 3k per month to service debt. not giving much if any positive cashflow. im 26, fico about 700, bit a cash (rather not use) still have a JOB and looking to increase cashflow a bit. does anyone see potential here and if so, how to pursue? all comments welcome. fire away!

at these numbers, would deal even be worth it? if not, how about @ 300k?