Looking for financing help on an off market 4 unit deal!
I recently contacted a seller (this is an off market deal) who is willing to sell his fourplex to me at an agreed price of 290k. The closing costs for FHA are out of this world so I wanted to go conventional for a few reasons
Smoother close
I know I can qualify for the mortgage amount if I can burrow money to put down and eventually give back of course :)
Stronger deal than FHA
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Rents $2495
Unit 1- $895
Unit 2- $750
Unit 3- Vacant
Unit 4- $850
Expenses
Property Taxes : $245/mo
Insurance : $227/mo
Vacancy : 5% (extremely strong rental area)
PM: 7% ($171.50)
Lawn care: $50/mo
Reserves : $100/mo
Cap ex: $100/MO (very well taken care of stainless steel throughout, roof 5 years old, new paint, HVAC 5-6 years old)
Expenses $893.50
(Income) Rent - expenses =
(NOI) $1476.75
Mortgage- $969 (With bridge loan or other burrowed money 30% down (87k)
70%LTV
NOI - Mortgage = Cashflow ($507.50)
Bridge loan payment - $580/MO
87k at 8% 2-3 year balloon
-$72.51 cashflow with (bridge loan)
$507.59 cashflow without bridge loan
Keep in mind I did this for only 3 units, I will be owner occupying this property or should I not?! (Unit will rent for $800 post move out)
$629.09 (adjusted to PM :) ) cashflow with bridge loan (before money is pulled out)
$1209.09 (adjusted to PM) cashflow after bridge loan is payed off!
Could this deal work? I could burrow the bridge loan at a higher percent? I’m trying to find a way to get financing for this deal to make it a cashflow monster when i refinance all the money out at the end of year 2 or 3? Does anyone have any suggestions? Am I missing something? Does anyone know anyone that could help me make this deal work?!
Thank you for the help in advance!