Re: What would you do? (another one) - Posted by Jack/TCG
Posted by Jack/TCG on March 03, 2001 at 20:46:58:
Hello Nathan,
What is it appraised at? Not FMV (fair market value), but the actual value on appraisal?
If it’s appraised higher than the Seller is asking, or, if it would be worth more (by comparable pricing in the area), then I can tell you how you might be able to get it, and put money in your pocket at closing. It won’t cost you anything but what it takes to bind the Purchase Contract.
Also, is there an existing mortgage against the property? Taxes run how much a year? Insurance? Etc.
Would the Seller be willing to give you a first mortgage at 65% of LTV (loan to value), and then be willing to sell the first mortgage at closing for a discount? However, he/she (the Seller) would not be losing any money, and is why you need heavy equity on your end, so that you make out on this type of deal. I’ll explain it more fully if the figures are right.
If you have that info, I’ll explain the process. But friend, you need heavy equity on your end. If doing a little rehabbing after purchase would raise the value considerably (depending on comps for the area it’s located in), then the method would be worth consideration.
Here’s an attached form to evaluate the property with, and go here for Calculators Galore
http://www.decisionaide.com/MPCalculators/Menus/MP_Calculators.asp
Talk at you another time —Jack
PROPERTY ANALYSIS FORM
Date:______________________________________2001
Name of property:______________________________
Age of property:_______________________________
Location:______________________________________
Type of property:______________________________
Area it’s in: (Nice, or otherwise)_____________
List price: $__________________________________
Appraised value: $_____________________________
Cash required: $_______________________________
Existing assumable financing: 1st Lien Amount: $_______
Annual payment: $_______
Interest: _______%
How many years does the lien have left? _______
Existing assumable financing: 2nd Lien amount: $_______
Annual payment: $_______
Interest: _______%
How many years does the lien have left? _______
Existing assumable financing: 3rd Lien amount: $_______
Annual payment: $_______
Interest: _______%
How many years does the lien have left? _______
Potential financing:1st Lien amount: $_______
Annual payment: $_______
Interest: _______%
Potential financing:2nd Lien amount: $_______
Annual payment: $_______
Interest: _______%
Potential financing:3rd Lien amount: $_______
Annual payment: $_______
Interest: _______%
Scheduled gross income: $_______
Less vacancy and credit loss: %
LV & CL amounts to: $
Gross Operating Income: $_______
Less Operating Expenses:
Taxes: $_______
Insurance: $_______
Utilities: $_______
Advertising: $_______
Licenses and Permits: $_______
Management: $_______
Payroll: $_______
Payroll Taxes: $_______
Supplies: $_______
Services (lawn service, trash pick-up, etc): $_______
Maintenance: $_______
Reserve for replacement costs: $_______
Ground lease: $_______
Anything additional:__________________: $
__________________: $
__________________: $
__________________: $
__________________: $
__________________: $
_______________: $
: $
Total expenses: % $
Operating income: $
Other related income: $
Net operating income: $
Income adjusted to financing (Check one):
Actual_________
Potential______
Equity: $_______
Net operating income: $_______
Less loan payment on first loan:
First loan interest: $_______
First loan principal: $_______
Total first loan payment: $_______
Less loan payment on second loan:
Second loan interest: $_______
Second loan principal: $_______
Total of second loan payment: $_______
Less loan payment on third loan:
third loan interest: $_______
third loan principal: $_______
Total of third loan payment: $_______
Gross spendable income:
Rate: %
Gross spendable income equity: $
Plus principal payment: $______
Gross equity income:
Rate: _%
Gross equity income equity: $
Less depreciation:
Personal property: $_______
Improvements: $_______
Real estate taxable income: $_______
Zoning:
Number of divided units:
Size:
Square Feet:
Sewer:
Parking:
Office:
Utility Room:
A/C System(s):
Heat System(s):
Elevators:
Furniture:
Equipment:
Unit Descriptions:
Rent per each Unit: $
: $
: $
: $
: $
Building constructed of:
Roof:
Landscaped:
Size of lawn area: