BiggerPockets

Here's how I see this deal:

Gross rents: $625
Operating Expenses: $312
NOI: $313

Mortgage ($35K, 30 yr, 7%): $233

Cash flow: $80 per month

This is not a terrible deal, but it would be better if bought at about $29,000.

Good Luck,

Mike

Mike,

I'm having a hard time finding a lender that will give me a 30-year loan on my investment properties. Should I run the analysis using what I'm told I can get (15-years at 6%) or do I just use 30-years at 7% to get a rough estimate of my costs? Probably a dumb question, but I figured I'd ask anyway.

There are lots of lenders but all the ones I've talked to in the 2 areas that I invest (10 or more) consider the loans to be "commercial" since I'm buying under an LLC. They say that they don't do more than 15 years on commercial loans. Maybe my approach is flawed. Not trying to get off on a tangent, but I appreciate any advice I can get.

Yes, the small loan amounts seem to be the problem. No one around here wants to touch them. A few banks said they don't even deal with LLCs unless you are dealing in investments over 1 million... I'm far from that! LOL. Our company owners all have good credit and cash reserves as well as documented income. I guess maybe I need to push those facts a little more when they say they don't do 30-year mortgages for LLCs.

Josh,

I can't believe I'm saying this, but try Bank of America. I just went under contract for $21,200 loan (cost of 2-fam house was 26.5K, so 80% LTV). BofA is doing the mortgage. Rate is 6 7/8% for 30 years with 3 points. I know it's high, but at these amounts the actual dollar difference between 5 7/8 and 6 7/8 for example is trivial.
The only catch is the LLC. They told me I'd have to purchase the house in my name, but that after I made my first payment I could transfer title to the LLC.
They're a huge pain in the butt to deal with because they're just too damn big and you'll have racked up hours on hold by the time you close, but if that's the only way...

Dave, Bof A seems amazingly loose on their credit cards given the current environment. I have a few of their cards with $15K-30K credit lines that they are constantly offering me 0% offers for 9 months or so. They do have 3% up front fees, but could be used to buy cheap houses.

I definitely see that you save money in the long run. I'm looking to get started and pyramid up so I'm more interested in positive cash flow. I would think, if I can have positive cash flow with a 15-year mortgage that could be the best of both worlds, but harder to accomplish.

For sure. That's where I need to start. I just moved to a new area so I'm talking with other local investors to find out who I have the best shot with.