This is what the agent representing the property just sent:
Owner financing consists of two notes for property:
1.) Assumable 96 month term note at 6% subject to approval by note beneficiary.
Term remaining - 67
Balance remaining for 105- $147,909.22
Balance remaining for 106- $170,822.51

2.) New 2nd note financed by current owner at 6% on 20 year amortization with 3 year balloon to repay or refinance balance.
Principal balance to be the difference between purchase price and remaining balances on 1st position assumable note at time of closing. Each of the two properties to have equal halves of that amount as principal balances.


Monthly payments
Main assumable note-
105- $1339.73
106- $1483.01

New smaller note- $725 for 105 and 106 combined

It is for 8 units in a C area.

Property taxes -
105- $3,713.49
106- $3,623.85

2016 Operating Income-
105- $24,273
106- $24,458

2016 Net Income-
105- $14,215
106- $18,044

Sq. ft.
105- 4130
106- 4130

Lot size-
105- .25 acres
106- .26 acres

Tax appraisal-
105- $215,350
106- $210,150

Year built –
105- 1995
106- 1996

Zoning code- R-4: Multi Family Residential District
Age of hvac- original with construction in 1995
Age of roof – unknown, no leaks
Property type- traditional townhouse
Construction – brick
Unit specs- all 2 bedrooms, 1 and a half bathrooms. Both beds upstairs, half bathroom down. Deck on back. All units nearly identical in layout. Washer/dryer closet downstairs.
Advertised rental rate- 695 monthly.



Management: contract with Management
New leasing fee: 200
Management fee: 7% of gross
Management contract is on month to month basis

*would I be able to eventually refinance out of the seller financing
*is this a bad deal

32k combined NOI (assuming your figured your NOI properly with out debt service)- 42k in debt= -10k year carry (not prolly figuring in any cap x or vacancy). As I steal a line from the rich dad book, how many deals can you continue to buy if you buy deals that lose money vs ones that cash flow.

Agreed with @Chad Nagel
Looks like from what you posted that this place loses money, quite a bit of money actually with the scenario that you presented. Didn't run the numbers further than noticing that but maybe if you put a down payment into this and really dig into the numbers it could have some chance of being a project worth pursuing, not sure though. The assumable loans might be a deal killer on this one just because of the high payments.

@Erica Shaunta Thompson I think others have hit on it but your monthly debt service payments exceed your NOI. I think that’s probably all you need to know.

That's what I was thinking. The negative cash flow is crazy. I was trying to figure out a way to structure the deal to be able to refinance out and buy the deal at the asking Loan amounts while they are worth the 215,000.


Originally posted by @Chad Nagel :

32k combined NOI (assuming your figured your NOI properly with out debt service)- 42k in debt= -10k year carry (not prolly figuring in any cap x or vacancy). As I steal a line from the rich dad book, how many deals can you continue to buy if you buy deals that lose money vs ones that cash flow.

I was trying to figure out a way to structure the deal so that the payments wouldn't be so bad. The notes are making that quite difficult. 

Originally posted by @Andrew Johnson :

Erica Shaunta Thompson I think others have hit on it but your monthly debt service payments exceed your NOI. I think that's probably all you need to know.

The notes are very high for such low rental income. I was trying to figure out a way to structure the deals with the asking loan amounts to make the deal a win. 


Originally posted by @Joe Cantanzriti :

Agreed with Chad Nagel
Looks like from what you posted that this place loses money, quite a bit of money actually with the scenario that you presented. Didn't run the numbers further than noticing that but maybe if you put a down payment into this and really dig into the numbers it could have some chance of being a project worth pursuing, not sure though. The assumable loans might be a deal killer on this one just because of the high payments.

@Chad Nagel What if I were to take over the note but refinance them in 6 months?

@Joe Cantanzriti  It loses quite a bit of money with the bigger pockets calculator its rather high.

@Andrew Johnson Pretty much a bad deal at this point.  I was looking at the value of 215,000 and he only wants 143,00 and 172,000. Meaning I would go in with lots of equity.

@Erica Shaunta Thompson I wouldn't try too hard.  I would also be curious if they are using "Operating Income" as a their parlance for "Collected Rents".  If that is the case and the advertised rents are $695 then you should have $33K in gross rent potential.  If they only collect $24K then they either have 27% vacancy, many rents are under this $695 advertised rate, or both.  And, again, assuming that Operating Income = Collected Rents then you have 106 operating with expenses of roughly 25% which is a really low.  I'd posit that over the long term it will be hard for you to maintain a 25% expense ratio in scenarios where you're paying some utilities, property management, general maintenance, landscaping, pest control, etc.  It's just tough to do.