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Updated almost 10 years ago on . Most recent reply

User Stats

360
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Dante Pirouz
  • Investor
  • Almont, MI
302
Votes |
360
Posts

Need help analyzing this seller financing

Dante Pirouz
  • Investor
  • Almont, MI
Posted

I am looking at purchasing a 27 unit that has seller financing. Here are the terms of the financing: 

Purchase price: $339,000

Down: 25%

Loan terms: 5 year term at 6% with a negotiable amortization schedule

The units are 1 bedroom/1 bath at $450/month and 100% occupied. The big expense seems to be landlord paid utilities which are averaging $170 per month per unit. The current rents are about 15%-20% below market. 

The downpayment wouldn't be a problem but my real concern is whether the cash flows would be positive given the 5 year loan term. Any advice would be appreciated!

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