Tired Landlord, pls help me eval. this deal (long) - Posted by Sandy FL
Posted by Sandy FL on May 26, 1999 at 07:26:41:
Tired landlord, also behind in payments, and has a family emergency overseas and needs cash now. Willing to take 10k (maybe even 5k, he adds) and sign over the deeds on his 5 plex and his rental house.
Here is the data as I understand it so far. I am on my way to go see the properties and research the titles. 5plex (7/5), rents are 2915 a month, fully rented, good condition. Loan balance is about 164k, payments are 1400/mo P&I. Comparable sale for another 5 plex (5/5) down the street recently sold for 380k. (Somebody WAY overpaid there)
House, rented section 8 for 800/month. Loan bal approx 60k, comps in the range of 90-100k. Both structures in good condition, as far as I know (so far).
I was trying to evaluate this as a 6 plex for ease of figuring value. The problem is the guy says he is 10k behind in payments, has 8k in taxes outstanding, and the bank has told him to pay the 10k in arrears by the end of the month (May 31) “or else”. (foreclosure, I would imagine)
So anyway, using a very conservative 40% for maintenance and vacancy, (Gross rents $44580 - 17832) = 26748 NOI. Loan balances (164k and 60k) + 10k payments in arrears + 8k taxes outstanding + 5k cash to the guy = 247K. 26748 NOI div by 247000 = 11 CAP.
If you are with me so far, I invite your comments.
Also, on subject to deals, (give the guy 5k and he signs over the deeds and security deposits, etc)… of course the delinq payments would have to be made up at once, but would I have time with the tax liens? I thought delnquent taxes are to be paid at the time of transfer? (even with subject to’s?)
Thanks for shedding light for me. What a week for my favorite attorney to be out of town!