**Minimum Down** Deal Analysis
Here is the Deal!
Owner going into foreclosure pay off amount is $43,146.75 on the property (including escrow taxes, back payments, insurance, fees, etc.). This is the pay off amount according to the lender. Her goal is to walk away from the property.
FMV is $74k conservatively. Local comps are showing an average of $82k to $86k for similar property.
- FYI - Annual debt service is calculated based on an asking price of $57,529.18 w/ 75% LTV. 30 year term. 4.625% interest rate which comes to $2,661.96 annual debt service
Monthly Rent $750.00
Vacancy Allowance @ 10%
Expected Annual Gross Income $8,100.00
Estimated Annual Operating Expenses
Insurance $400.00
Property Taxes $2,861.00
Property Management (10%) $810.00
Repair/Maintenance (8%) $648.00
Total Annual Expenses $4,719.00
Net Income $3,381.00
Annual Debt Service Mtg #1 $2,661.96
Annual Net Cash Flow $719.04
Loan Principal Reduction $541.00
Combined Return $1,260.04
I think the property does well w/ 75% LTV on the purchase price. I want to structure the deal so at closing I only pay for closing costs, underwriting costs for MY lender for the loan, and also to pay off her note..
My goal is to obtain the property for minimal cost.. I just don't know how to structure it... I don't know if this makes sense but I was thinking to put down $57,529.18 for sale price and do 75% LTV making it a pay off of $43,136.75 on her note (which is the sum that she owes) then the $14,382.43 money down on the property would I take it back?! Would this be legit?
I know I have something here I just don't understand the right way to structure it to make it work for both of us.. Please share your experience and what you would do in my shoes!
Thanks in advance!!