20 year old seeking advice on first portfolio acquisition
Hey everyone!
After countless hours of cold calling, I believe I came across a gem of a deal. I am in communications with an individual who is looking to liquidate some of his portfolio as he is completing a hotel acquisition. This is an off-market deal located in Milwaukee, WI. The units are all completely occupied and cash flowing day one. It is 3 duplexes, renting for 1950, 1600, and 1500. Here are the numbers on the purchase of the portfolio:
Some assumptions - 50% expenses, 70% LTV (DSCR Loan), $4500 origination fee for DSCR loan, interest rate of 7.12%, 30 year am.
Let me know your thoughts as I would love any advice here! (side note - LtL annualized = $20,779 if we went section 8 route. However, would need to put money in to get up to code for s8 standards).
| Portoflio | ||
| Purchase Price | $230,000.00 | Could be $225k |
| Down Payment | $69,000.00 | 30% |
| Legal/Closing Costs | $4,500.00 | |
| Mortgage | $161,000.00 | |
| Interest Rate (%) | 7.12% | |
| Number of Years | 30 | |
| Income | $60,600.00 | |
| Expenses | $30,300.00 | 50% |
| NOI | $30,300.00 | |
| Mortgage | $13,009.72 | |
| Cash Flow | $17,290.28 | |
| DSCR | 2.329027404 | |
| GRM | ||
| Cap Rate | 13.17% | |
| Break-even Ratio | 71.47% | |
| Cash on Cash | $17,290.28 | 23.52% |
| Total Return | $17,290.28 | 23.52% |
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#1 Private Lending & Conventional Mortgage Advice Contributor
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- Austin, TX
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#1 Private Lending & Conventional Mortgage Advice Contributor
- Lender
- Austin, TX
Looks like a great deal from a numbers perspective - however, out of state investing at this price point (very cheap properties, etc - oftentimes you will likely not be dealing with quality tenants so that could eat you up as a new investor, especially if you are out of state).
- Robin Simon
- [email protected]
