There is a deal we found of 5 duplexes for 825,000. The units are 2 bed 1 bath. They are currently rented out at 570 per unit which is under market for rent. (Market rent is about 650)
We have 40K cash. We would love to get this deal.
Help us get creative with financing to get this deal. And go!
The rent means nothing since you don't get to keep all of it. What's the cash flow.
Joe is right, just running some rough quick numbers the project would be a bust more than likely even if you could find a lender who would loan you $825,000 with roughly 5% down (40k).
A 4.5% rate on a 20 yr am would get you a payment of $4,966.30 per month. If you got your assumed market rate for all 10 units you would gross $6500 per month. Running both of those numbers out annually you end up grossing $18,404.40 left to cover property taxes, insurance, maintenance, and saving for cap ex. The margins would probably fall over to negative cash flow pretty quick. I live in southern Indiana and if I average out my duplexes, 5 cost me over $20,000 in property taxes, and we have a pretty low tax rate. Insurance again averaged lands at about $5,000.
This deal would need more cash in to make it profitable, not saying its a bad deal but you would have too much debt to make it cash flow based on the above assumptions.