Posted by gordon on February 13, 2002 at 14:18:47:
dude you are way in over your head if you think you can buy a 24 unit and don’t even have 2 nickels in your pocket to rub together… and You said you just filed bankruptcy??? Why would anyone want to lend you money? Get your own financial situation on track and then maybe start out with a cheap single family house…
Here’s the deal…need help on 24 unit - Posted by Rob
Posted by Rob on February 02, 2002 at 21:35:30:
I am looking at a 24-unit building in Ohio.
Asking price $795,000
Net income 78k/yr
I have poor credit (BK< 1 yr old), and absolutely zero cash, is this hopeless? I was thinking of a couple ways to do it, including hard money cash only offer at 60% ltv, or maybe a combination of hard money plus a seller financed 2nd, or 100% owner financed. It seems to me the only way to do it without any money out-of-pocket is to get the 100% owner finance deal. Any other option I will at least have to pay for an appraisal or points up front which I don’t have.
Any suggestions?
Re: Here’s the deal…need help on 24 unit - Posted by Ed Garcia
Posted by Ed Garcia on February 03, 2002 at 14:14:51:
Rob,
You’re on the right track. Just remember nothing ventured, nothing gained.
The technique you’re attempting can work with your circumstances, but I don’t think the deal is strong enough to absorb the cost of hard money. If your NOI is right, it’s just under a 10 Cap.
Another thing I’ve seen is where the buyer found a trade for the seller with profit in it and used that profit for the down payment as well as a seller carry-back.
You’ll be surprised what you find when you look for it.
Lets face it Rob, you’re going to have to look harder for a deal than an investor with money and credit, but it can happen. My suggestion is to look for a motivated seller who is in trouble with their units. This kind of acquisition will usually have lots of upside.
Don’t be afraid to find a partner. If you found a property with up-side potential, it usually needs to be renovated and than you can present it to another investor to partner with.
Never let anyone discourage you, when working a deal like this. The difference between fantasy and reality on a deal like this is the potential and up-side of the deal, as well as a solid game plan.
What do I mean by solid game plan. I mean for you to do your homework. That will allow you to know your deal, giving you confidence when approaching a potential partner. When they see your confidence, and that you have a good deal, they in turn will not only have confidence in you, but will want to do your deal.
Ed Garcia
Re: Here’s the deal…need help on 24 unit - Posted by Bill
Posted by Bill on February 03, 2002 at 08:55:45:
Lower your sights considerably.
Do some yard sales or buy and sell a few junker used cars first. Then work your way up to junker mobile homes, (with the proper license of course).
Do those kinds of things for awhile and then start looking at fixer houses to flip. Work your way up from there.