Posted by Shirley on July 20, 2003 at 12:36:53:
Sorry, you can tell I am new. We expect to rent the house for $600, the unit that needs rehab will require about $2500, and can rent for $300-$350. Thank you all for your responses. Shirley
financing - Posted by Shirley Bulen
Posted by Shirley Bulen on July 20, 2003 at 08:27:43:
I have the opportunity to purchase a property that includes a single family home and a duplex. The house has been rehabbed, is very clean and in move in condition. One of the duplex units is rented at $450/ month. The house has previously (before rehab) rented at $575. The other duplex unit is vacant and needs some rehab before renting. The price is $96,000. It’s located in an older stable neighborhood, the comps in the area for single family homes are 80,000 to 90,000. I have an excellent credit rating, but only a small amount of cash to use as down. Does anyone have any suggestions how to finance this? I believe the cash flow is built in here, and I have the ability and resources to complete the rehab on the duplex. I am new at real estate investing, and don’t know how to create the “creative financing” scenarios. Thank you!
Re: financing - Posted by Ed Garcia
Posted by Ed Garcia on July 20, 2003 at 12:27:21:
Shirley,
You?re vague about the information regarding your purchase when you say,
?One of the duplex units is rented at $450/ month. The house has previously (before rehab) rented at $575. The other duplex unit is vacant and needs some rehab before renting.?
We don?t know what you intend to spend on the rehab, how long it will be before it will be income producing, what it will rental income for the unit that you?re going to rehab be, etc. You also mention that the house previously rented for $575 prior to now indication that it is empty and giving us the impression that it could possibly rent for more.
Because the information is not clear to me, I will not comment on the deal other than to tell you that based on the information you?ve provided, you should be able to get either 90% financing, or with the seller carry-back of 5% or more it could easily be an 90-5-5 meaning Lender financing 90%, Seller carry-back of 5% and 5% down. Most lenders will require 5% of your own money to be in the deal.
Ed Garcia