6-Unit with Owner Finance
Is this a good deal for a first Multi-unit? I'm kinda caught up because of the balloon @ end of finance.
Seller Financed Terms:
Sale price: $165,000
15% upfront cash deposit and $1538.27/month for 60 months with a balloon payment due at the end of the term.
Interest rate: 2%
The monthly payment of $1540 would encompass the principal, interest, taxes and insurance.
$553.35 would be applied to principal
$153.37 would be applied to interest
$831.55 would be applied to taxes and insurance
Total payment of $1538.27 or
$165K for the building with 15% down and $1525/month for 48 months
Gross Annual Rental Income = $37800 or $3150/ month
Annual Operating Expenses
Taxes & Insurance $9978.60
Water/Sewage $3600
Waste Management- $1200
Gross Annual Operating Expenses = $14778.60
Net Operating Income = $23021.40
Or $1918.45/month in positive cash flow
Cap Rate = 14%
I'm thinking of trying to negotiate the purchase price down a bit as $165 is above market value.