Posted by Steve (OH) on January 30, 2001 at 18:11:58:
Hello all. I need some help in structuring the purchase of two duplexes for buy/hold near a large university campus. Here’s the skinny:
Asking 200k each. Seller has agreed to carry 10% back, but it is at 11% the first year, 12% next, etc. until a baloon is due at year 5. 2nd is amortized 30 yrs.
I am trying to minimize my out of pocket downpayment etc. (as we all are) and am therefore (I have strong credit, good debt to income, etc.), looking at structuring the financing in an “80/20” fashion as well. 1st at 8% and 2nd at 11%.
Gross income is 1250/unit which equals 5000 total (good rents in my opinion…each side is FIVE bedrooms!). Taxes are currently 200/month (both buildings), but would go up with new sales price (owner bought both for 125k/each in 1989). PMI (if I did 80/20) would be approx 200/month (which SUCKS!..but it is the cost of doing biz).
Appreciation rate in this area has been at/about 8%/year the past 5 or so years.
I am thinking of closing on the 1st of the month and therefore getting 5000 in security deposits, 5000 for that month’s rent and another 5000 in the next month’s rent prior to my mortgage being due on the 15th of the third month.
The reason I am wanting to minimize my out of pocket is because I want to do some cash buys this year, but want to buy good solid cashflow properties in the meantime.
Any input is helpful…I also posted this on the main newsgroup…thanks.