Posted by Jasonrei on July 04, 2002 at 16:35:13:
I’m thinking get a hard money loan to buy and repair. Later on get a loan to pay off the hard money and put addtl in your pocket. But you’re probably looking for a referral to a specific lender, huh?
Thoughts on an 10-unit FSBO - Posted by mei122@ameritech.net
Posted by mei122@ameritech.net on July 03, 2002 at 19:44:35:
I’ve come across an 10-unit residential building that is for sale. The asking price is $150,000. It is comprised of eight two-bedroom units and four one-bedroom units. It currently uninhabited since it needs rehabbing. I figure it will require about $50,000 to rehab although I will get bids from three contractos. The two-bedroom units can be rented for $800 per unit while the one-bedroom units can be rented for $650. This brings the gross annual rental income to about $86,000. With a GRM of 4, the building is worth $345,000. With higher GRMs (and I think the GRM on this building is higher), the value will go up. The units are not heated individually.
How shall I approach this situation? My credit is not the greatest. I am very interested in pursuing all avenues available to acquire this property. If I go with a hard-money lender, 60% of $345,000 is only $207,000.
Does anyone have suggestions?
Re: Thoughts on an 10-unit FSBO - Posted by mei122@ameritech.net
Posted by mei122@ameritech.net on July 03, 2002 at 19:52:48:
One more thing… I would like to hold on to the property after rehab.
Re: Thoughts on an 10-unit FSBO - Posted by Bob Pekol
Posted by Bob Pekol on July 08, 2002 at 20:44:50:
See if the owner will allow you to put down a your down payment in an escrow account that may be drawn upon to do your renovations. Have him hold a first mortgage or do a rap around. See if they will hold it for a year and a half or so and that should give you enough time to rehab, fill the building and season it enough for you to get a new loan. Work on your credit during that time. Do whatever it takes to fix it. When you get the new loan, cash him out and you have a fixed up building leased out that appears to be a good deal. I just did a similar one. If your credit is really bad, see if you can take on a parter who will be able to get the financing after your initial year and a half.