Need Conventional Financing On 8 Unit(CFD) ED? - Posted by Larry(MO)
Posted by Larry(MO) on July 01, 2003 at 07:06:47:
Hi You all. Havent posted in a while but i need some help.
We recently obtained an 8 unit apartment complex on 10 acres that is laid out for 5 more units.
We were able to buy this for 400,000 with no money down.
The builder owner only had 2 people paying out of 5 and
was in a desperate situation.
We may have paid top dollar(the unit had a recent appraisal for 350,000 but that was with one lot) The rest of the land is very good with state approved lagoon system
and a mini storage unit on the land as well.
And buying with no money down top dollar sometimes seems ok.
Well anyway we have the units all rented and it is running smoothly and pulls in a net of 3200 a month. Cash flow is very tight but we have been able to pull from other properties to help the first 2 months while we did evictions
for the deadbeats that had never paid anything at all to the seller.
The way the deal was structured the first year our payment would be 3000 a month and then drop to 2500.
Sunday evening we found out that the seller was 2 and almost 3 months behind on his note and was going to be foreclosed on monday unless payment was made.
I know that we should have used an escrow for this but small town MO we dont have one and we also looked at paying one check directly to his lending institution out of our
real estate account but we were concerned about the DOS clause possibility.
All of this changed yesterday. I contacted the lender and
he told me he dont care where the funds come from.
We then had a meeting with the note holder seller. He
was going to lose the building and his house that day if he didnt make his payment.
His building payment is 1800 and his house is 700. The additional 500 that our payment made was for living expenses.
He has agreed for us to make the payments directly to the lender for 2500 and drop the addition 500 since he has
"dropped the ball" and the kicker is that when we asked
him how much it would cost to buy him out he told us
50,000 cash. He owes 223,000 on this Apt with one lot and we have contract on the whole 10 acres like i said earlier
so we are looking at around 275,000 to make this happen.
We have 3 banks in our town and have several properties
with each and need at this point to look elsewhere.
I Believe the appraisal should hit at approx 400,000
We rent these for 400 a month including utilities. We have 7
rented this way(we actually have them pay by the week)
The eigth tenant we inherited and she pays 400 a month and her own utilities.
Our water bill was 175 last month and electric was also 170 ish.
Insurance is 309 a month and our taxes are 600 a year.
This unit is only 2 years old and has stove fridge washer dryer furnished.
We need financing to cash the seller out so any help would be appreciated. Thanks For Taking Time To Read This.I appreciate all of the quality people on this site and your advice.