4-Plex in a trailer park throwing me for a curve ball
Member since 2020 · 5 posts · 0 votes
Hey all can you help me analysis this 4 plex. Just drove past the property and now i'm confused as its located inside a trailer park. I think its over priced but looking for ways to make it work.
Listed at $720k.
Long term tenants. 2-7 years
Rentals are $900 $950 $1200 $1300.
Average rentals in the area come back around $1400-$1700.
Property last sold in 2021 for $425k
Property taxes $1300.00
Being in a trailer park im not sure what I will be able to get for it for the rentals.
Seller is also listing agent. Anyone have any ideas on how to make this deal work?
Located in NC
Hi, Based on the information you provided, I see this as a negative cash flowing property at this price. After debt servicing I only see 442 which will be eaten up by capex and repairs @5% each.
Hi, Based on the information you provided, I see this as a negative cash flowing property at this price. After debt servicing I only see 442 which will be eaten up by capex and repairs @5% each.
@Alexander Glasser If the seller is also the listing agent, I'd bring up this information to their attention. It looks like they're trying to make more money than the property may be worth. In my opinion, they should be trying to convince you to buy the property by proving their figures are in line with the property value. If not, then there's a lot of room for negotiation.
To be honest, it may take some time. The best thing to do is keep the door open and maintain the relationship. Check in every now and then to see if they're willing to work with you and negotiate the price and/or work with the terms (possible seller financing). In my experience, I've found that time passing has a way of changing sellers' minds as long as you stay in contact.
Hope that helps!
Hi, Based on the information you provided, I see this as a negative cash flowing property at this price. After debt servicing I only see 442 which will be eaten up by capex and repairs @5% each.
If I was able to seller finance this deal with no money down. Where would you feel comfortable with the price? The idea I had was to get a conventional loan through my lender. Get the difference in loan and asking price from private money temporarily. Which would be the seller financing portion. As we close on the deal, the private money would go into a second escrow account which would never hit the sellers bank account and would go back to me. I would then pay off the private money, and have a note with the seller for that amount or even more.
For example. I would get a 500k conventional loan and make up the remainder for 220k with a private party. The 220k would be seller financed after we close. The 220k would go into a second escrow and be distributed to me and I would then pay the private lender off and have a note with the seller for 220k. Maybe I can get a note with the seller for more to cover all fees ect. This way I have no money into the deal.
thoughts on this approach? If I can get rents up to 1400 each in the first year would this still be a bad deal?
Hi @Alexander Glasser, that sounds great! if you have no money in a deal then any cash flow is positive. 2 things, 1, what rates would you get? I assume 7ish for the conventional and you could even do a 1% interest-only loan for the seller carry. This will lower your financing costs which will increase your monthly cash flow.
2. Have you talked with the seller about this? I had a seller agree to carry 40% for a deal I was working on and it was tough to get them to agree to 2nd position. I see this as the only hurdle. Do the leg work and keep us posted.
Hi @Alexander Glasser, that sounds great! if you have no money in a deal then any cash flow is positive. 2 things, 1, what rates would you get? I assume 7ish for the conventional and you could even do a 1% interest-only loan for the seller carry. This will lower your financing costs which will increase your monthly cash flow.
2. Have you talked with the seller about this? I had a seller agree to carry 40% for a deal I was working on and it was tough to get them to agree to 2nd position. I see this as the only hurdle. Do the leg work and keep us posted.
Hi @Alexander Glasser, that sounds great! if you have no money in a deal then any cash flow is positive. 2 things, 1, what rates would you get? I assume 7ish for the conventional and you could even do a 1% interest-only loan for the seller carry. This will lower your financing costs which will increase your monthly cash flow.
2. Have you talked with the seller about this? I had a seller agree to carry 40% for a deal I was working on and it was tough to get them to agree to 2nd position. I see this as the only hurdle. Do the leg work and keep us posted.