All Forum Posts by: Chad McGibbon

Quote from @Shawn McCormick:

Who is asking the question, you or your client? What is the reason behind the inquiry..do they need capital for another purchase, looking to retire and cash out, possibly 1031 into a larger multi-family?

Sounds like they are in a pretty good situation unless taxes and insurance costs are going to eat heavily into cash flow or the properties all need cap x improvements and they would rather sell than fix them up.

I would have buyers for these if that is what they are looking for.

 Hey Shawn. I am asking. In both scenarios, they are looking for the best possible way to maximize cash flow. Whether or not its worth doing a re-fi to pay off other units and then refi those to purchase new units, etc. Any opinions on either situation?

Scenario:

Client owns 4 rental properties. 2 SFH and 2 duplexes. One of the duplexes is actually a lease option with a 30 year note. Total owed on all properties is around 350k or 300k without the lease option duplex. Total value of all properties is right around $1m so a good amount of equity.

Prop 1 SFH: mortgage amount around $950, rented at $2175

Prop 2 SFH: mortgage amount around $900, rented at $1725

Prop 3 Duplex: mortgage amount around $1000, rented at $1400($700/side)

Prop 4 L/O Duplex: mortgage around $800, rented at $1850($925/side)

What would you do here?

Those properties are very possible. As an investor in Florida, Jacksonville is a massive area for those types of houses. But with that being said, I’d rather have a 120k house that cash flows the same that I’d rent for $1200. In my experience, the person that can come up with $1100-$1300/month just for rent is a different quality person that the $600-$800 person. Not that either person is bad, it’s just your tolerance to risk.

I had something similar happen and all I had to do was put my situation in writing and fax it to the mortgage company, they didn't care at all.

I'm curious as to if anyone can help me figure out a way to structure a seller financing deal? I've never done one before and I was interested in doing one especially if it's very little out of pocket for me. I found a 3/1.5 house in a mediocre neighborhood but I own 3 properties in a neighboring area and I know I could rent the house for at least 900/month. The plumbing, electrical, and flooring have all been updated. Pending an inspection I think it could be a good house as a rental. Any ideas?