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Jonathan Taylor
  • Lender
  • Los Angeles, CA
647
Votes |
916
Posts

Four plex adventure! Purchasing story in LA

Jonathan Taylor
  • Lender
  • Los Angeles, CA
Posted

Hi BP folks,

Since I've gained so much from the purchase and rehab stories here I thought its my time. Here are the details of my project. This will be a Buy Rehab rent, I will NOT refi. Details below. 

My goal for this property is to replace or lower my current rent of $1500/month to get into a property that WILL cash flow once I move out. 

Listed as a triplex, asking 850,000 ( this is in LA so those of you from PA or MO, thats the going rate for multiplexes here)

3/2 main house, 1300 sq ft. ( I will live in this one)

duplex contains two 1 bed 1 bath, approx 450 sq ft each. 

SURPIRSE! Also contains an unpermitted garage studio conversion. approx 300 sq ft. 

One unit will be delivered occupied paying 1200 month. 

Rehab time:

6 weeks. New flooring, kitchen and bath for the vacant 1/1, studio will be rehabbed but depends on permits. Stand by on this one. 

Known problems are:

Sewage pipe needs to be snaked every 6 months, might need a new system

The existing tenant was described as a "pain in the ***". This is rent control so as a landlord I have little power here but I've only spoken to the current owner so he could be incorrect.

Loan details:

20,000 down, 

830,000 over 30 year at 4.25% * ( see below for loan details)

monthly payment 5250

pro forma income at fully occupied units

1/1: 1200

1/1 1800 (rehabbed)

stuido 1100

total: 4,000

out of pocket each month 1250. That is a win here!

prelim rehab cost: 80,000 (if needs a new sewer system)

This is an ongoing project as I hope to enter escrow tomorrow or Wendesday. Will be updating as I progress since Ill be in a 45-60 day escrow due to my loan limits. 

* Im using a program called NACA which allows me to put less than 20% down without PMI. For those interested PM me. Its not for the investor but for the beginner.

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