Eight Condos, is this the right structure, and how do I get the loan? (long) - Posted by Reif
Posted by Reif on May 13, 1999 at 17:02:18:
I have a lady who would like to sell all of her eight condos to one buyer. They are all free and clear, HOA is $135/month.
Six are occupied at $495/month, fair rent probably $525.
She and her husband are older, just want out of the landlording business.
She says she’ll take a small second, but will not take back a large chunk of paper, because she has “put a lot of years in the business and now I want to spend the money.”
She definitely would prefer to sell all eight to one buyer, and has not contacted a realtor yet because I am in the picture.
I’ve only got one comp so far from Dataquick, of 38K.
Seems to me I’m gonna have to get a conventional loan of some type, which means I have to come up with at least 55K (25%) cash, or I have to do 80-10-10, which is a higher interest rate (8%).
What I’m thinking:
Sell one of the vacant units for a simultaneous close (30K net).
Let the seller take back a 12K second.
Deal looks like:
$168K first at 8% ($1233/mo)
$12K second to seller at 8% (Maybe - $88/mo)
7 x 135/mo (HOA) ($945/mo)
10% vacancy ($367/mo)
Incidental expenses ($350/mo)
Total Expenses: $3158/mo.
Rents: $525 x 7= $3675/mo.
The numbers look pretty good . . . I figure the rents and deposits will cover the points on the loan. The big question remains . . . how do I get a loan for eight condos? This actually will look like eight separate deals unless someone has a better idea. I do not want a blanket mortgage.
Any thoughts would be appreciated.