All Forum Posts by: Chelsea Wessman

@Jason D. I cannot thank you enough for breaking that down for me.  Also thank you for alerting me about a possible pre-payment penalty.  I will add that question to my list of a thousand questions to ask the seller.  Everyone on here is so helpful!

Originally posted by @Stephen G. Wolff:

A balloon in three years may put you in a bad situation. I recommend you put in 5% and the seller take a carry back note and you secure long term fixed rate financing (traditional). The carry back note could be 7-8% with a 20 year term fully amortized. Back of the napkin math may work, but if I was the seller you do not have enough skin in the game to make it work. Perhaps you could purchases an option and come up with the rest of the cash for traditional financing...

I appreciate your feedback.  I know we aren't quite where we'd like to be for a down payment but this sort of fell in my lap and, assuming I could make the numbers work, I'd be stupid if I didn't at least try.  I am not yet familiar with the terms "carry back note" and "purchasing options."  You've given me something to dig into a little deeper, thanks. 

@Wayne Brooks I doubt very much he'd be willing to do a 30 year amortization.  Am I incorrect in understanding that the balloon means the time I have to refinance?  I would refinance as soon as possible to get out from under that interest rate!

@Jason D. I keep hearing seller financed deals have a very short amortization schedule of under 10 years?  I've been running the numbers with 5 and 10 years.  I also feel like the interest rate is high.  Here's the part where my novice shows through.  The statement made was "the utilities are included in the rent."  but on the sheet it shows them as separate expenses so does that mean they pay it themselves or I do?  I assume I do here?  

I'm about as green as it gets and currently running numbers on my first potential deal.  

He's willing to do seller financing and the triplex is worth about 160-165K.  We can only scrape together 5% down currently-hence the initial appeal of seller financing. For the life of me I can't figure out how to make the numbers cash flow with a 3-5 year balloon payment that he casually suggested.  He also mentioned he's looking for an 8% interest rate.   I know he's open to negotiation but at this point my eyes are starting to cross running the numbers over and over again while changing the variables.  No matter what I seem to do I'm in the negative here with such a short loan period and high interest rate.    If anyone is willing to take a look at the info below and suggest any other options I can attempt to negotiate I would be so grateful.

There has got to be a way and I'm just not experienced enough to know what it is!  I still have so much to learn, but I won't ever get anywhere if I don't start taking action. 

Long time tenants are on month to month leases and utilities is currently included with the rent. I'd manage myself. How much should I calculate in for CapEx and repair/maintenance costs here? The roof, furnace, and water heater are all new within the last 5 years.

Apt 1: $675 1 Bed
Apt 2: $800 1 Bed
Apt 3: $550 Studio

Gross Monthly Income: $2025.00

Expenses

RPU: $137.56 14/Mo. avg.
MN Energy: $109.70 14/Mo. avg.
Trash: $80/Mo.
Tax: $221.66/Mo.
Insurance: $125/Mo.
Lawn/Snow/Maintenance: $160/Mo.

Originally posted by @Jessica Grewe:

Yes, we meet up every 3rd Thurs. at 7pm at Keller Williams on cty rd 22.  Free to join.  I hope to see you there.

Thank you so much for the info!  I cannot attend tonight but I look forward to making it next month.

Chelsea

Originally posted by @Nicholas Moucha:

Stop by Collider Coworking this week or next.  Give me a call or stop on by (if I am not there ask for my card)

I am an agent here in the town and well networked with some investors and learning everyday. I can guide you in the right direction for some good networking groups. 

Nick

Collider Coworking on downtown above Blue duck restaurant

Colldier

Nick,

I greatly appreciate you reaching out!  I'll be in touch. 

Chelsea

I am brand new and still soaking up every bit of information and knowledge I can get my hands on. I learn best by discussion and conversation and would like to meet investors in my area and market. Does anyone know of a meet up in the Rochester MN area? The cities are a bit too far to attend consistently.

I am brand new and still soaking in all the information and education I can get my hands on. I learn better by discussion and would like to be able to network, does anyone know if there is a Rochester MN real estate investing type meet up? The cities are just a bit too far to be able to consistently attend one there.