Help analyzing a fourplex in Oklahoma city

16 Replies

Hi, 

    I am looking into a fourplex and I am hoping someone could help me in analyzing the deal and how I can structure it with a hard money lender. What are some of the more common things to factor in on a fourplex to see if it has a potential cashflow. Also, I am thinking of going through a hard money lender to get funding for the deal, is deals a good option? if so, what kind of loan would be better a regular loan or interest only loan or is there another option? Sorry for all the questions I am dead set on getting my first property but want to make sure I don't miss anything. Any tips are greatly appreciated, guys.

post some details or shoot me a msg and I would be happy to give you some feedback .  

Hi Rhett,

    Thanks for the reply, I don't really know much unfortunately other than it looks like it needs some repairs not sure how much until I can see the property.  Potential income is 2k/month if all units occupied. Asking price looks like it is a bit higher than market value but if it has a positive cash flow this should not matter right?

Promotion
Sharestates
America's Private Lender
Receive Fix and Flip Funding Approval In As Little As 24 Hours!
Sharestates helps developers and brokers secure funding quickly with the most competitive terms.
Get Funded

I'm a complete newbie here in Portland OR only signing my first deal two days ago, however I grew up in Del City Oklahoma, this is why I clicked on the link. Anyway I thought hard money was only beneficial on short term deals, no? 

Good luck. . . . 

its deeper than cash flow.  does it meet the 1% rule?  if not i would move on if so then dig deeper.  also who is paying utilities?  why aren't all units occupied?  is it currently at or around market rates? 

Hi Jay,

     Thanks for replying, Yes I heard that before as well so any input on that is also appreciated. I'm thinking maybe down the road I can refinance for a longer term or maybe I can find a private lender that is willing to do a longer term loan. Unfortunately, private money or hard money is my only way to go for now, I figure if I can acquire bring it up to rental condition and get some cash flow coming in I can look for a better loan in the future.  Do you guys think this is a good plan or are there other options I should consider first?

@Rhett Tullis I am not sure on the one percent I think I need to wait and see what loan terms I can get and what the amount will be, or is it possible to figure that out now? 

As far as the utilities the tenant would pay the electricity and I would cover the water and trash, I don't believe there are other utilities like gas on this property.  How would I be able to figure out how much I would need to set aside to cover this?

Is it in livable condition? Would you be willing to live in one of the units for a year? Could you possibly get financed with an FHA 203K loan? If you could it would save you the hassle of having to refinance and you could get a better interest rate than a hard money lender.

@Luis Gonzalez

Welcome. Time to build the legacy first. Fill in the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 100 past ones to catch up on.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

Consider checking out HUD homes for small multi's owner occupied gets first crack.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul 

Promotion
Speed To Lead
Buy hot seller leads w/o subscription
Buy daily seller leads that are actually ready to sell
Finally there's a place where you can buy leads that asked for urgent help selling their house
Sign up for free

@Luis Gonzalez  I do not have any experience with the 203K loan (not even 100% certain on the name).  I just have read about it here on BP.  Others have said that they have used that form of financing on homes that need repairs.  Google can probably give you some information about it.

@Luis Gonzalez  Typical hard money terms for residential investments. 75% of purchase, 100% Rehab + closing costs. 12 month loan. interest only. 10-14% annualized. No prepay.

100k purchase, 50k rehab. 

25k down

Total loan amount: 135k

12% rate

monthly payment: $1,350

Conservatively I would always use 25% down if they ask you for less it ends up being a bonus. 

hope this helps :)

There's a post called 'Too good to be true? - A quick property analysis' by @Brett Alphin that you can use the search key to look up either by title or Brett's name, that I hope you find as interesting as I did if you get a chance to look it over.

Best of luck!