Help with 6 Unit Financing 3 posts by 3 users

Posted: 08/11/2008 at 08:50PM

I'm wondering if anyone has any ideas on how I can get into a 6 unit property that I am looking at. The owner says he is willing to either hold the note or help with the down payment on the property. The property is selling for $112,000 but I think I can get it for less than that. It would also cash flow pretty good. My problem is I'm not to sure how to get into it and I am looking to put as little into it as possible. Here are the numbers.

Exepenses:
Water and garbage: $1100 yearly
Insurance: $1150 yearly
*Taxes: $6100 yearly
*Utilities: $6400 yearly
* Utilities costs can be eliminated, by having tenants pay their own utilities and/or adding 3 additional electric meters. I personally divided usage and charged tenants based on estimated usage.
* State legislation passed a tax cap of 2% for landlords, effective 2009 taxes, which means that at a purchase price of $117,000 the taxes would be $2340, not including any exemptions you may be eligble for. Read this link for more information.
http://nwi.com/articles/2008/03/15/news/top_news/doc9e0f636ddd6eee448625740d000dc292.txt

Annual Gross $43,800
Annual Expenses $14,750
Net Profit $29,050

Any ideas? This property is located in the South Chicago area.

Posted: 08/12/2008 at 04:42PM

I agree, that the expenses are too low for a 6 unit multi with utilities paid by owner. You will have vacancies, PM fees, advertising, possible evictions, etc. You will also have repairs and maintenance as well as makereadies when tenants move. With all that said, the price you could get this unit at with owner financing makes it a great deal.