All Forum Posts by: Brian Campbell

Another investor wants to sell his properties. A duplex we looked at might be a deal but wanted to get some feedback before I make an offer. It's an up/down duplex and the owner pays the heat/electric/water/garbage. This property was a sfh turned into a duplex. The property will not need any work. It's an older building but the furnace and roof are newer and the electrical has been updated. The bottom unit rents for $650 and the top for $625. The seller wants 36K. Here are the numbers using bank financing:

6K down

Mortgage payment: $245.13 (15 year loan @ 5.5%)

Taxes : $57

Insurance: $60 (est and this may be high)

Heat/Elect: $300/mo.

Water/Garbage: $100

Expenses Total: $762

Total Income: $1275

Would be interested if you experienced investors think this would be a deal.

Thanks!

My out of pocket costs to buy these two houses with conventional bank financing is 5K. I've got a solid relationship with my bank!

I don't think he's selling them to me that far off of what they're worth. He's trying to sell all of his rentals and move to Florida. I can get a higher retail price for these properties if I sell them on contract. I've had good luck with doing that so far.

Thanks for the responses! Both of these rents are below the market rent for my area. My wife and I will be managing these properties. The P/I is $141 for the one bedroom.

Deal #1: 2 bedroom house with 2 stall garage that doesn't need any repairs.
I've been talking to the seller and he said his final offer was $32,500. Rent is $500/month.
Principal and Interest amortized for 15 years is $265.55
Taxes: $68
Ins. approx $40
Total PITI: $373.55

Probably not much of a deal here if I hold it as a rental.
I could sell on contract for $47K (get 3-5K down) and get more cash flow since contract buyer would be responsible for taxes, insurance and maintenance.

Deal #2 One bedroom home needs no work. Same seller said $17,200 was final offer. Rent is $325/month
PITI Total: $207

Again probably not much of a deal here as a rental.
Could sell on contract for 25K (get 3K down).

Looking for opinions/advice with these deals.

Thanks for your help!

I don't understand how these are negative cash flow deals. Could you please explain?

How did you determine there would be a negative cash flow? Please explain. Thank you.

One bedroom should have $130 positive cash flow and 2 bedroom will have approx. $149.

Maintenance, vacancy, etc are not included in these numbers.

Could use some help in analyzing this deal. I'm trying to buy 2 more rentals. One is a one bedroom that gets $325/month for rent. Insurance costs are $35/month and taxes would be around $35/month.

I can buy this property for 17K. My bank will loan me the money at 5.5% and $1,700 down. Amortized over 15 years.

The other house is a two bedroom house with a nice garage that rents for $500/month. Taxes are $68/month and insurance is 40/month.

I can buy this house for 33K. Bank will give me same terms with $3,300 down.

Neither house needs any work and both have tenants. Current rent is below market rent.

Please let you know your thoughts.

Thanks!

I would like the input from you experienced investors on this situation.

I would like to purchase 4 more investment properties. We currently own 14 units--9 single family homes, a 3 unit commercial building, and a duplex.

The homes I am now looking at purchasing need no repairs and are currently occupied. Two of the furnaces are old and the appliances are old in one of the homes. Appliances are generally included in our rental market.

The seller has several houses and wants to move to Florida and wants to get out of rentals. I’ve looked at most of his properties and these are the ones that I think will work for us.

I am considering making 2 offers--a buy on contract offer, and a buy using conventional funding offer. The seller said he'd be open to selling them on contract.

I’m including the total costs for the 4 units (one is a duplex with one bedrooms each side).

Owner is asking a total of $120,500 for the four properties.
Current rent $1,925/month (rent is low for the market and needs to be increased over time)

Total Monthly taxes: $230
Total Monthly Insurance est: $175

I’m not sure how to structure the offer if I buy on contract (the seller said he’d sell on contract with a 2-3 year balloon payment. Could use some advice here.....thinking of offering $113,000 with 5k down at 6% for 3 years.
My payment would be $647.51/month

The other offer would be with bank financing. I’m not sure how low to go here. The guy is no dummy so I’m not going to steal them but the numbers have to work for me. He’s a realtor and his family has invested in rental properties for a long time.

Looking for advice on how to structure this so it works for both of us. Would appreciate your help with this.

Thanks!