Re: Whats the best way to invest in this property? - Posted by Ed Garcia
Posted by Ed Garcia on November 28, 1998 at 13:00:26:
Congratulations on doing your first deal.
I think it?s great that you?ve learned how to structure a deal with creative
financing, having the seller carry back 10%.
However to further invest, I think you should put more thought into your
deals as to how do you plan to structure them for profit.
You made a statement, (Hopefully it will produce $200 monthly income).
You should always do your homework. You should know market rents
so well that you are comfortable that $200 a month is conservative.
You also don?t mention the profit structure of the first deal, leaving me
with the feeling that you bought it at market .
Your second deal, seems to be a purchase price of 77% LTV.
But that figure is based on the asking price, and you don?t mention if
you got market comparables. As a matter of fact you don?t give us enough
information about this deal to know for sure how to structure it for you.
You don?t mention your financial picture,( if you have more to put down).
You don?t mention what the seller owes on the property ?
You don?t mention if the sellers existing loan is assumable ?
You don?t mention what your intentions are with the property, so I am
going to assume you are going to rent it.
The first thing I would do is find out what is owed against the property,
and if the loan is assumable.
The next thing I would do is get comps on the property to make sure I?m
correct about my values.
(don?t forget to get comps on the market rents while your at it).
Robert, I?m a tuff buyer. For me to pay 77% LTV, it would have to be a
fully leveraged deal. Meaning no money out of my pocket, with a
positive cash flow.
But we all look at a deal differently.
Just remember one thing , ( you make your money on the buy).
If I were to do this deal, I would either get the seller to carry, or do a
If you decide to do the deal with new financing.
The lender to use would be North American.
They have a NOO program at 90% LTV, as well as a seller carry back
program at 85%LTV, 5% buyer down, 15% seller carry back.