Updated almost 10 years ago on . Most recent reply
My Third Deal, Another 4 Plex
Hello Bigger Pockets members. I am just sharing information about my potential third deal. The property is a 4 unit located in Tucson, Arizona.
A little background first. Last year I bought my first two properties, a 4 plex in Phoenix, AZ which I bought with a conventional mortgage and 25% down payment, and a 4 plex in Tucson, AZ which I bought with an FHA loan and 3.5% down payment and owner occupy. The person that I bought the 4 plex in Tucson from actually owns another identical 4 unit property right next to the one he sold me.
So every once in a while I would see the guy as he fixed things and collected rents from his tenants. He often expressed how he was sick of being a landlord and was ready to sell the other property as well. Anyway fast forward to today and I tell him that I want to buy the other property from him. He agreed to owner finance the property with 20% down, 5.5% interest with 30 year amortization, and a 5 year balloon. Since I already own the property right next door, I know the price and cash flow are good, even though I will be paying a little bit more than I paid for the one I purchased last year. Also I am able to get around all of the bank's mortgage rules by owner financing and get into my third property a whole lot sooner than expected.
Purchase Price $170,000
Down Payment $34,000
Interest Rate 5.5%
4 units, built in 1986, 800 square feet per unit, 100% occupied, Class C
Tucson, Arizona
Monthly Rent $2400 ($600 per unit)
Tenants Pay All Utilities
Property Management 7.5%, $180/month
Insurance $800/year (based on what I pay)
Taxes $1200/yr (based on what I pay)
Most Popular Reply
Awesome! Great job, and it'll be nice to have two so close together!