8 Unit assumable loan. Need Help

[Giordano Rodriguez]

Hello Friends,

I have an opportunity to purchase an 8 unit property in the Hudson Valley- Kingston NY. The loan is an assumble commercial loan for $270k the seller is looking for his equity portion of $80k. The total is $350k. 

Looking for creative ways to get this deal done. Could I assume the loan at $270k and take out an equity loan for $80k to pay the seller? 

What could I expect from the bank? 

How could I get this done?

Thank for your help. 

Gio

[Todd Magin]

@Giordano Rodriguez 

WOW - those taxes are insane!

From the numbers you supplied:

1) There is no allowance for vacancies (5-10% typical).

2) There is no allowance for property management (8-10%)

3) There is no allowance for maintenance/repairs (5%)

4) There is no allowance for capital expenditures (10%)

When adding in the above allowances, the property cash flows with the $80K down (approximately $600/month), but it could go negative if you finance the remainder (depending on the terms of the loan)

If/when the interest rate goes up, you'll need to factor that in as well as the above was based on the 4.5 rate.

You can use the BP rental calculator to "play" with the numbers.