Troubles with Multiples... - Posted by David (TN)

Posted by phil fernandez on May 21, 1999 at 19:21:36:


Why won’t the seller finance the remaining seven houses? He’s getting his cash out of the other fourteen. In fact if you can’t find financing for the remaining seven, I doubt if anyone else can get them financed conventionally either.

That puts the ball back in the sellers court. If he wants to sell the remaining seven houses, he will probably have to finance them. How else is he going to sell them.

Another point. If you buy the seven houses, with a lack of anyone willing to finance them, when you go to sell them the same problem will probably be there as far as no financing is concerned. This would lower the value of these houses if they are not easy to obtain financing on.

Troubles with Multiples… - Posted by David (TN)

Posted by David (TN) on May 21, 1999 at 16:24:55:

A fellow investor has 21 homes that he is selling me at a good deal, but I can’t seem to get it financed ! There are 4 houses on one tax deed and another tax deed has 3 houses on it. Lenders won’t touch them and the city won’t allow me to split them up because they were grandfathered in before lot size restrictions. I have the other 14 financed through various institutions, but the 7 I just can’t get. I tried a note buyer, but by the time they discounted the note it was way under what the seller wanted and I would have gotten too hard of a hit if I tried to do the difference as a second. I am even trying to find someone to maybe buy all 21 properties on a note. Any suggestions ? I’m not a newbie, but I’m stumped !

appraised value : 735,000
contract price: 615,000

Tried creating note using this scenario: sale price 735,000, I put 35,000 down, note created for 700,000 at 10.5% over 30 years, and he will sell the note for 630,000 (the extra will pay for closing costs).

rental income is 98,000 yr.
taxes and insurance is 4,800.00 yr.

Re: Troubles with Multiples… - Posted by PBoone

Posted by PBoone on May 21, 1999 at 20:41:40:

Your trouble is not with the financing. Its with the deal. Heres the short version
$615,000 Purchase price
$5625. Payment per mo. on 615K @ 10.5% 30yr
$98,000 Income
$73,500. Noi div by 12 = $6125 per mo
$6125 minus $5625 = $500.00 divide by 21 houses =$23.81
That is a very big risk to take for such little profit. I would suggest looking at selling some to pay down the principle balance on the remaining to increase the income.