Am I analyzing this commercial property correctly?
Hey BP!
I have approached a For Sale By Owner commercial zoned property with agreed upon purchase price of $200,000. I am doing a purchase + improvement loan. My lender is requesting 25% down on Finished Value. Finished Value will be $350,000 after Rehab. Down Payment needed will be $87,500 + closing costs, lender and appraisal fees, which I asked seller for seller financing the Down Payment and fees, totally roughly $100,000. Starting mortgage loan $262,500, 5% interest, 25 year amortization. My Rehab budget is $60,000 coming from LOC and family to make this property into a triplex with monthly rent income of $3000. PITI on this property is $1900 monthly. Cash Flow after cap ex, vacancy, property management, lawn maintenance is $300 monthly.
I wish to REFi Finish Value amount at 80% LTV. I am getting Analysis Paralysis and also getting confused with all the numbers. Does what I am planning to do make financial sense? If not, how can I improve this situation to BRRRR this deal and repeat!
Thanks!
Steve