Long story short, I am a wholesaler, but something interesting came my way, and I want it, or I think I do. I have never owned rental property, but I plan on hiring management since the property is out of town. An older man wants to sell me 3 of his rental properties. I looked at them already and they are rent ready, no issues, literally no repairs needed. The properties are already rented, and have been occupied for 3-5 years each. He bought them discounted, and only wants $100,000 for all three. Current taxable value from the county puts all three combined at $210,000. This is where my questions come up.
Currently, I am speaking with a private lender to give me 100% of all money +closing fees. Should I have all three properties on separate contracts? Would this make a difference when refinance comes.
Assuming I do refinance in 6-12 months. Should I inform the private lender that that is my plan? Do they need to know?
When I refinance, will I basically be getting the appraisal difference minus financing fees? That is what it sounds like, but that seems too easy to get a property for such a discount.
Each loan can be put on each property separately (or they can be bundled) regardless of whether you purchase each property on the same contract. The only advantage to having different contracts would be that a purchase price for each property would be clearly stated (although you could put in the one contract what price is being assigned to each property if you want). To me, this doesn't really matter if the bank is willing to do a cash out loan based on the appraised value (instead of how much cash you have in the property), so it really doesn't matter whether you buy them on one contract or three. I would go with one just for simplicity's sake.