positive cash flow - can't finance - Posted by GinBC

Posted by GinBC on July 09, 2002 at 17:00:38:

It’s in Vancouver, BC but I think I should have left the 160 unit part out as it is only one unit in the building. Sorry guys - hopefully my future posts will be clearer.

positive cash flow - can’t finance - Posted by GinBC

Posted by GinBC on July 09, 2002 at 13:37:53:

Hi all,

I’m in Vancouver, and I have found an 3br 1 bath apartment that I can tie up with $3000. Problem is that there is a $3000 tax lien on it and no-one will finance with the lien in place. Property managment company collected the tax and maintenance fees and took off. All of a sudden people found their taxes hadn’t been paid and liens were being assessed. Realtor tells me the city is supposed to have the liens cleared up one way or another by end of August. This is in a multi-building complex of 160 units.

This one is in foreclosure and the court is asking 69,900. Realtor says I could get it “subject to liens being cleared” for $60,000. He suggested I tie it up and wait until the lien is taken care of by the city. Rents for 900/mo. Maintenance fee of $275 includes heat, hotwater, taxes, insurance.
Properties are selling quickly here and vacancy rates are very low. It seems in my newbie head that if it could be tied up for the $3k and financed it could genreate a slightly positive cash flow.

My numbers say the absolute most I should pay would be $52,700 (Small Profit)including resale costs to flip. But if I get this at $60K and lease option it for $1000/month It does seem to work. I just don’t have the cash reserves to cover anything major should it go wrong (Just starting to work on my $25000 reserve as per JohnBoy’s getting started post). This is the lowest priced 3 BR I have ever seen in Vancouver. Most 1BR apartment units (in Vancouver proper) are selling for more than $100K. This is the first time I have seen a rental be able to cover the whole mortgage, taxes, and maintenace fees. Am I missing something?

Thank you for your time.

G in BC

P.S. This is an absolutely fabulous resource. I wish when I read No Money Down and got the materials in '91 I did more than talk to a couple of R/E agents who outright laughed at me saying it can’t be done. There were absolutely no ads in the paper for vtb mortgages at the time. Now they are all over the place. Keep up the great work and thanks for the inspiration/motivation/support for all of us Newbies out there!!!

Re: positive cash flow - can’t finance - Posted by jeff

Posted by jeff on July 09, 2002 at 16:37:35:

i know im gonna sound like a moron for this, but i have read this wrong or it is VERY misleading.

are you saynig there is a multi-buildnig complex of 160 units for sale for 69K and your gonan allow a 3K lien to get in the way? i know smoethign isnt right with this, this complex should go for half a million id guess if its even half way decent. i am missing something. please explain this to me again and then tell me the address to mail the check, I WANT IN!!!

id have no choice but to giggle all over myself while i wrote a 3K check and paid off the lien and another 3K check to tie it up in contract. and then id try not to get too excited while i was writing them a 69K check without even negotiating.

please tell me im reading that wrong and GL(ON) missed it. i know GL(ON) would have been all over this if it was as simple as it looks to me. PLEASE EXPLAIN!

i dont beleive theres a 160 unit complex on the planet that aint worth 72K. is it currently on fire and cant be put out because of some weird supernatural chemical flame?

Re: positive cash flow - can’t finance - Posted by GL(ON)

Posted by GL(ON) on July 09, 2002 at 14:49:22:

Go back to the RE agent and make an offer conditional on the tax lien being cleared.

Then take the accepted offer to the bank and ask for a loan again, pointing out that the court has agreed to clear the lien before closing.

If the court won’t go for this, get back to us. There are other angles but that is the simplest.

Don’t be afraid to make a low offer. If there is a cloud on the title and it is being handled by the court, that alone will scare away most buyers. Of course I don’t know how hot the market is out there and how many sharp buyers there are.

What are similar units going for? If you are paying all cash (mortgage advance + down payment) you should get 20% off. If not keep looking.

I hear houses with basement apartments are popular in your area. They have the advantage of costing only $5000 or $10000 more than a normal house but bring in nearly twice the rent.

Re: positive cash flow - can’t finance - Posted by GinBC

Posted by GinBC on July 09, 2002 at 16:56:00:

Sorry, I didn’t make myself clear. It is one unit in a 160 odd unit building. Obviously this looks even less attractive without the other 159 units being thrown in LOL.
If it were the complex, I’d sell my Mother to tie up the property if I had to. (just temporarily though, I’m not heartless.)

Realtor says buyer doesn’t have to pay lien - the city is taking care of it. It was the realtor who suggested exactly what GL(ON) said - write an offer subject to title being clear. The realtor wasn’t thrilled when I told him I would need investors to in it with me. Something about “you and everybody else”. You know, I was so shocked to see any real estate in Greater Vancouver under 150K. I thought it was some funky land lease or a leaky condo waiting for assessment but other than the lein…
I guess I’m just wondering if it’s worth my time to pursue it? It seems to work but as a newbie I wonder what I am missing. Hope this clarifies things.

This is in… - Posted by Andi(CRO)

Posted by Andi(CRO) on July 09, 2002 at 16:45:43:

a 160 multy-building complex.
3/1 apartment.