6-Unit Investing Scenario (numbers included)
Hello BP,
I currently have about $20k in the bank and I was considering purchasing a 4 family unit using an FHA loan, but my realtor just showed me a commercial 6-unit building, with the seller willing to finance the remaining 20%, while I put down the 20k (~5%).
I'm a relatively new investor and just closed on my first property December 2016. This deal feels like an opportunity because the seller is willing to finance the remaining 20% with a 5-year balloon payment at an interest rate of approximately 6%. Just wanted some feedback and thoughts on the deal.
Would it be wise to execute the 6-unit deal first then purchase a multi-family with an FHA or vice-versa?
Here are the numbers:
| Price | $ 369,000 |
| 5% | $ 18,450 |
| Seller Finance 20% | $ 73,800 |
| rent roll | |
| $ 900 | |
| $ 940 | |
| $ 975 | |
| $ 975 | |
| $ 1,033 | |
| $ 1,050 | |
| total (monthly) | $ 5,873 |
| Annual | $ 70,476 |
| EXPENSES | |
| Tax | $ 11,000 |
| Utilities Expenses | $ 9,360.00 |
| heat & hot water | $ 6,000.00 |
| insurance | $ 2,800.00 |
| NOI | $41,316.00 |
| CAP | 11% |