You need to verify those gas bills being paid by the landlord. Account for vacancies, repairs and maintenance, defered maintenance, advertising costs to get new tenants, etc.
The defered maintenance is things like a new roof, furnance, A/C units, etc. You take the average life expectancy of this items and divide the replacement cost over the number of years it will take until they need replacing. Then you need to figure that amount to be held out from the monthly income each month so that money is available when the time comes to replace them. If any of these items will need replacing soon, then account for that cost in the purchase price. Based on the income your showing, that couple of hundred could get eaten up pretty quick. Do your homework on this!
Hello everyone, I have found a deal that looks to be a real money maker. This is a 3 unit building bringing in $1080 mo. Tenants pay all but gas. The owner had it listed for 97K awhile ago, but now the price is $75,900. Ok, lets say that it’s actually worth 85K for the sake of owners wants(97K list seems high) If these numbers are fairly acurate, what would be the best way to structure this without much money out of my pocket? If you need more details please let me know. I would really appreciate any help/info anyone would have to give. Thanks
Kevin
What is the present balance on the mortgage? Is it assumable? What is the current interest rate?
What are the neighborhood comps and values on other similar properties? What are you looking to do with this one, quick flip or keep it?
I don’t know the balance on the mortgage, but I do know it’s not assumable. However, I was able to get 3 OK comps, which came in around 91K. Thats 16K equity. I want to hold for a while. That 1,080 per month, which can easily and realistically be raised, looks pretty good. With the right financing structure, the extra couple hundred would come in handy. Also I forgot to mention that all 3 units are metered separately and taxes are $960 per yr. The property looks good from the outside. I get in on Wed to take a closer look. With all this said, I would just like to hear some suggestions on how I should structure this, so I can move on this one. My credit is decent, but my income to debt ration is way off (wife stopped working to be home with the kids)
Thanks in advance and everyone keep spreading the gift that you have.
Kevin