financing 5+ units property - Posted by Jeff Castle

Posted by Ed Garcia on January 13, 2001 at 20:11:09:

Jeff,

You don’t need 30% down to do this deal. I’m a little burned out today from answering e-mail and other post, so I’m not gong to give you much detail. If you want to talk more about it you can call me at (909) 944-0199 next week and I’d be glad to give you more detail.

Bottom line, get a rental survey showing that the rents on the 8 units are below market rent. If the numbers you’ve given us are true and you can get $600 a month per unit. You can show Gross rents of $4,800 a month. Times 12, that’s $57,000 a year gross income. Cutting you numbers in half, gives you $28,250. Now Jeff, you normally wouldn’t do it that way, but I could see we have some fat in this deal if you’re right, so I just threw some numbers out there. $28,250 at a 12 Cap, the units would be valued at $235,416 if you used a GRM( gross rent multiplier) of just 5, the property could be worth $285,000. Jeff I don’t know the market in the area, and I’m just playing with numbers. But there is no question that this is a deal.

Jeff, you need to go to a small bank and put together an Academy Award winning presentation. I would put down $10,000 and use your other units for additional collateral, cross collateralizing the loan with both properties. I realize that you don’t really have enough equity in you other units, but were just putting up for good faith. The value of this deal will be in the complete rented units. I would have the bank lend you the money for fix up and put it on a voucher system like a construction loan. The bank will then be reassured that the work will be done, and feel comfortable that you know what you’re doing.

Jeff, first of all, you’ve got a good deal here. You need to know your deal so well that when you make your presentation to the bank, the bank will feel like a fool if they should pass up this loan.

Ed Garcia

financing 5+ units property - Posted by Jeff Castle

Posted by Jeff Castle on January 12, 2001 at 19:22:06:

me im 25yrs old make 45k yr own 2 condos 30k value each 16k loan on each gross1275 mth net 600 also own townhouse with girlfriend 66k value loan 62k 734loan payment including condo fee+taxes 4th property bought 16000 4 months ago just sold didnt close yet will net 13000 profit financed with 15000 personal line of credit all this done in the last yr and half im now ready to move onto larger rentals the cost per unit is so much lower by the way im in the providence RI area now heres my latest deal im trying to buy 8 units bank owned listed on mls 114000 taxes 5000 50% rented 400 mnth all 2 beds 1 bath with large parking lot this property needs work but i do all myself materials 5000 tops and could be done over time I have perfect credit max rents around 600 per unit bank willnot finance citizens bank says i need 30% down plus 10000 for operating costs 44000 after i close later this month on other deal ill have maybe 20000 cash HOW CAN I MAKE THIS DEAL HAPPEN I DONT WANT TO WAIT AND SAVE 44000