Updated almost 9 years ago on . Most recent reply
Stuck between which deal to pursue
Looking to purchase my second property and I'd like some advice on which deal to pursue. I apologize ahead of time for this post being a little bit of a read.
Deal #1: Owner occupied 4 unit via fha 203k loan. Property needs a ton of work with 2 of the units being vacant and uninhabitable. Talked to a lender and I'm trying to get pre approved based on these numbers:
Current asking price: $51,900
Estimated repairs: $61,565
Loan amount: $113,465 with 5.125% interest rate
Ran multiple worst case scenarios with the rental calculator and each time I come away with good cash flow and CoC return. The only potential hiccup is the appraisal after repairs and having zero equity/negative equity. The other issue is that the lender is actually closing the program next Wednesday and I have to rush and submit a ton paperwork by tomorrow just to try and get pre approved. Also have to have an accepted offer from the seller by Wednesday which leaves me no time to negotiate. I've contacted multiple lenders in the Bloomington/Normal area and this was the only one that actually offers the 203k loan.
Deal #2: Off market 9 unit
Asking price is $199,000. 20% down payment is $39,800 and seller would be willing to finance $20,000. Average rent per unit is $450 which means there's room increase it. I currently have 2 people who "say" they're interested In partnering on this deal and it would mean less upfront money from me, but it's one of those situations where I'll believe it when I see it. My goal is to eventually bust into commercial properties and I feel like this deal would be a great opportunity.
Any advice would be greatly appreciated.