4 Replies


numbers!!!!! first let me give you numbers
(karla i hope you're listening)

$450k = asking price
$6000 = Rent roll = $7200 annual = $720k

Here is the sweet deal... (you thought that was it huh)

The property ALREADY has 100% occupancy, so the rent roll is as is right now. From what the guy tells me, no dead beats, good paying tenants.

$50 per unit = $300mth = $3600year
budget = $500 year
misc = $500 year
repairs = $2000 year
water = $800year
taxes = $2000year
heat = ? est. $3600 (six months)
insurance = $2000year incl liability
this all adds up to about $15k annually
mortgage on a property like this is $2850month = 34200year

So 15k plus 34200 = $49,200 annually
Rent roll = est. $72,000annually
net = 22,800 or $1900month cash flow

how's my math so far?
did i miss anything?

what would be my cap rate?

However, he is gun-ho about getting proof of some cash....not a problem, i'll show him some (notice i said some....$16k)

My question to you is do i go with a hard money lender and get the deal....later on (maybe six months) go to traditional loan?

Or should i go to a traditional loan now?

Or should i seek an investor to work with?

haaaeeelllllppppp!!!!!!!!!!!!!!!!! is not a panic button.....just excitement...

i luv this stuff....you know.....the stuff that life is made of....

In terms of your numbers it looks like a nice deal. Just one small detail, may just be semantics. What you have listed as "Rent Roll" would be call Gross Rent by some lenders. The difference is just that when referring to a Rent Roll, they usually also want to see when the individual leases are ending. This gives them an indication of how long they can expect the property to produce income at its current rate before you have to go out and find more tennants.

As far as the loan question, it depends on what your credit looks like, how much of a down payment you have, and how quickly you want the property. A hard money loan on a property that has more than four units is going to be 65% LTV max. The interest rate will also be relatively high, but you can probably get this type of loan pretty quick. For a more traditonal commercial loan, you will be able to get 80% LTV assuming you have good credit.

If you can just get the traditonal loan now and save some money. Thats what I would do. Only use hard money if you have to.

Originally posted by "MinnesotaLO":
The difference is just that when referring to a Rent Roll, they usually also want to see when the individual leases are ending.

You know - this was acctually a part of my collage degree believe it or not... B: 8)

Forgetting about the loan for a minute, there's some numbers here that I don't understand.

$50 per unit = $300mth = $3600year
What is this?

budget = $500 year
Budget for what?

misc = $500 year
Misc what?

repairs = $2000 year
Depending on how many units this sounds pretty low. Getting a crew to do a make ready can eat this up pretty quickly.

water = $800year
Granted, I live in a place with expensive water, but this sounds pretty low, in fact very darn low.

taxes = $2000year
Again, I live in a place with outrageous ppty tax, but this seems low, does it escalate on sale, like CA does?

heat = ? est. $3600 (six months)
Is if fuel oil, gas? both of these are undergoing pretty big jumps.

insurance = $2000year incl liability
Again, I live in a place with high ppty insurance, but this seems pretty low for the exposure you've got.

No opinion on the financing part, I'd sure want some severe due diligence before I proceeded on anything else.

all cash