Posted by Katie on September 02, 2003 at 21:02:12:
Christie,
If the seller is inflexible on terms, that leaves you with figuring out how to manage a cash deal. Your closing costs and pre-paids will, as you said, use up most or all of your $7K. I strongly advise against trying to lie to a lender about contract terms. That’s fraud.
You need to come up with ~$22K for a down payment. Do you have a home equity line available to you? Borrowing against credit cards is out, because you’re going to have to provide proof of funds if you go conventional.
Would the building lend itself to converting to a co-op or condo? If so, you could put together a business plan for conversion and possibly get the whole purchase price rolled into a convertible bridge loan that shows the lender realizing repayment inside of 6-9 months.
Bear in mind that $900 a month is not a lot of margin on an 8-unit deal. The numbers you gave reveal an average rent of
Super Cash Flow, Not sure how to purchase… - Posted by ChristieB
Posted by ChristieB on September 02, 2003 at 18:39:27:
All,
I have found an 8 unit apartment building listing for $219,000. It currently brings in $33,240 in rents. Less my mind be playing tricks on my, I’ve figured that after all expenses, this property has a positive cash flow of over $900 a month!
This is the first property I’ve ever considered purchasing and I’m at a loss on what to do. The seller is inflexible on terms but will take a little less than asking price on the property. I have approximately $7,000 dollars in cash which will only cover closing.
What can I do to make this happen? Can I get it appraised for more than the asking price, have a bank finance that large amount and not pay anything down? If it appraises at $300,000… can I pretend that I need 300K to the bank, say I’m putting down 30K but really by it for his asking price and pocket the difference?
Posted by Bert TX on September 12, 2003 at 11:25:25:
Christie, appraisals for commerical property and multi-units cannot be done through comparables in general, since there are few if any comparables to compare it to. In this case, something unique as that particular apartment complex. Appraisals will be done based upon annual gross income. Since you stated the property brings in over $33K in gross income, it would suffice to say the appraisal should be at least $300k.