Posted by Bill Jacobsen on May 30, 2007 at 12:27:41:
I am sure I don’t know all the details but I am assuming that the houses are now rehabbed. Can’t you rent the two vacant units and have possitive cash flow? Why not sell House number # 1 cheap and rent House #2. I am not sure why you have to refinance House #1.
I am assuming that you do know what went wrong on this deal and that you will learn from the mistakes. Unfortunitly, the tuition may be quite high.
Bill
in a REALLY, REALLY bad cashflow crunch…HELP! - Posted by Redd
Posted by Redd on May 30, 2007 at 10:03:02:
Hi,
I bought (2) 2-Fam houses from a wholesaler about 2 months ago. Houses are side-by-side. At the time, the numbers looked good and they still do but I am running out of cash.
Here are the numbers:
HOUSE #1
ARV: $230K
Total debt: $163,500
Repairs: $6,400
monthly debt service: $1,431.61
current income: $800 (2nd Flr. apt.)
This is a 2-fam house with 1 rehabbed vacant apt. The other unit is on a MTM lease. Tenant is on S8. Both apts. could rent for $1K per apt.
HOUSE #2
ARV: $230K
Total debt: $185,500
Repairs: $6,400
monthly debt service: $1,338.09
current income: $780 (2nd Flr apt.)
This is a 2-fam house with 1 rehabbed vacant apt. The other unit is on a MTM lease. Tenant is on S8. Both apts. could rent for $1K per apt. I have a $20K construction loan attached to this house. I used this money to both rehab both properties.
Original exit strategy:
Refinance HOUSE 1 and pay off contruction loan attached to HOUSE 2. After refinancing House 1, sell it and keep HOUSE 2. We would fill the vacant apt for HOUSE 2 and raise the rent for the other apt. Both apts. would rent for $1K each.
This is not looking good. Please advise.
Many thanks!!
So why don’t you rent the units? - Posted by Jack
Posted by Jack on June 02, 2007 at 20:07:44:
Two others have already stated the obvious here. Why don’t you rent out the vacant units if they will rent for $1,000 each? Then sell one of the building?
oh, and I read your short sale plan, thanks for the chuckle.
Re: in a REALLY bad cashflow crunch…HELP! - Posted by IB (NJ)
Posted by IB (NJ) on June 01, 2007 at 13:07:11:
In addition to the other suggestions you received, learn about wholesaling (instead of simply buying from wholesalers). It will assist you with your cash flow during rehab projects.
Ib
Re: in a REALLY, REALLY bad cashflow crunch…P! - Posted by David C. Cooper
Posted by David C. Cooper on May 30, 2007 at 12:30:21:
If you rent the vacant units out at $1k/month you’ll have your debt service covered, I don’t know if the net is enough to cover your taxes and insurance, but it’s a better position than you’re in now and will give you some time to make a new plan or market the properties for sale.
Unless I missed something…
Where are these properties?