Quick Question

Real Estate Investing Apartments
1

(Posted in Financing Forum but noticed not a lot of traffic through there)

Hello everyone:

I’m simply looking for the pros and cons (mainly cons) in funding this deal. 4-family in good shape, reasonable updates, fully rented. Would it make sense to get a “hard money” loan of 60% LTV with the seller carrying back the remaining 40? Credit is fair/good so my exit would be, at the very least, refinance the “hard money” ASAP (less than a year hopefully). Lets say the property cashflows pretty good with a hard money of 12% and a seller at 10%
Is this something that can be done on a regular basis without getting yourself in to trouble?

Thanks for listening

2

So it sounds like you want to hold on to it. Why don’t you just put 20% down and get a cheap mortgage from Fannie Mae?

3

I have good credit and a decent job. Good credit comes from using my money to pay bills and survive. I don’t have the money to put away and build that down payment. I’m trying to look for an additional source of income. Yes, I plan on holding to start. I’d like a steady flow of passive income from real estate. It will give me a chance to save money for down payments and then I can get into other creative options.

4

[QUOTE=StakOnes;891167](Posted in Financing Forum but noticed not a lot of traffic through there)

Hello everyone:

I’m simply looking for the pros and cons (mainly cons) in funding this deal. 4-family in good shape, reasonable updates, fully rented. Would it make sense to get a “hard money” loan of 60% LTV with the seller carrying back the remaining 40? Credit is fair/good so my exit would be, at the very least, refinance the “hard money” ASAP (less than a year hopefully). Lets say the property cashflows pretty good with a hard money of 12% and a seller at 10%
Is this something that can be done on a regular basis without getting yourself in to trouble?

Thanks for listening[/QUOTE]

Would work if you had back up cash if you ran into problems… but the goal I’d make is to resell it for a profit (and you should if it cash flows that good), and take you profits and invest in SFHs. Small multi family stuff suck for the most part. BTDT.

5

For some reason, my post didn’t show…

But after thinking about it, I’d ask the seller for zero percent, no payments (or small payments) for the first two years, so you could get good cash flow and have some time to resell.