So I found a older gentlemen through a family member that he maybe interested in selling 2 all brick 4plexs. I called and briefly talked with him. Just curious on what he wanted and what rent was. I want to set an appointment up and go tour the place. From my understanding nothing has been updated. Well he is asking 400,000 and rent is 600 a month across the board. Thinking a bit high. I haven't found out expenses yet.
I was toying with a hard money lender. Never have used a hard money lander. Right now I am just finishing a full remod on a duplex we bought last year. Tenants move in that next month. I didn't think he was ready yet, so this kind of came quick. He hasn't talked with a realtor yet so might be able to slide in there.
I haven't run any numbers yet. Was calling on garbage and water tomorrow.
@Chris Sukala , well, 8x $600/m gross rent meets a "1% Rule" for the pair of quads. That is, so long as your rehab/holding costs are held to lower than $40k for each quad. But given their "nothing has been updated" status, what are the odds of that? [Not that the "1% Rule" should be seen as a useful indicator for that location! Is it usually higher, or lower?]
As usual, you need to get a handle on the nearby sold comps. Is $50k per door considered an absolute bargain, given the amount of work you'll likely need to get done as well?
Is $600/m rent less than what you should be able to get per door?
What makes you believe that $400k is too high for an asking price?
Before you proceed with a HML, do you know how you'd refinance it, soon after?
So many questions, so little information. (But thanks for asking). All the best...
In regards to not having used a hard money lender before: Figure out the as-is value, if you are rehabbing, how much for rehab and the ARV. Present those values along with your plan to a HML and that should be enough to get pricing.
Brent was right about having a solid exit strategy, but a good HML will have options for you based on the information they collected. If you had a 400 credit score and are relying on a bank loan to refinance, the HML does understand that you won't be able to get out of their loan via that route... alternatively, if you have a 750 credit score and healthy assets, refinancing shouldn't really be a tough sell. Let me know if you have any specific questions about dealing with HML's and, with the information above, how it would be likely structured.
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