All Forum Posts by: Christian Podedworny

If iattain 10 year debt at 30 amt. through a Freddie Mac’s small business loan the rates would be 4.5-4.75%

12 deals 

At this time I’m looking to acquire a large 72 unit deal with OPM for most of the down payment. 

Example:

Purchase price $5,000,000

Down pmt:    $1,250,000

Amt:   30 year 

Interest: 4.5%

Interest only period: 3 years 

If the property will bring in an 8% return and I’m going to have $750,000 and the debt partners would finance the remaining $500,000 for the down payment I think this would work. 

The debt partner would receive 6% interest for 4 years and then their initial investment would be paid back at year 4. 

What are your thoughts ?

Would this strategy work and would it be risky ?

Initially I am seeking apartments for long term cash flow investments . I understand that appreciation in NYC is different compared to Florida which is why I am debating if I should choose cash flow over depreciation .

I have been reading and watching podcasts for the past 2 years which has given me the drive to invest in real estate with small steps. 

I would like to know if it's better to buy a apartment complex in Tampa/Orlando under $2,000,000 with a 8 to 9% cap or stick to NYC (Brookyn/ Queens ) where the cap is below 5.5% but the appreciation is greater?

I believe this topic has been discussed in the past but with the market prices, interest rates changing and differing views I wanted to get the latest advice.

Living in New York and knowing how quickly the prices shift with high appreciation there is much to be made but the low cash flow is detrimental to accumulating income from the initial acquisition.

How would you invest, where would you buy and why ?

   I am trying to find a strategy that would persuade a multi family home owner to sell thier property through owner financing which would make them say YES!!

In most scenarios sellers want security through a large down payment and a quick term so that they can get thier money but I want to approach them in a way where they will be willing to go forth with the deal.

Let's say we have a deal with these numbers(hypothetical deal ) :

50 unit apartment complex 

$2,000,000 purchase price 

8 % cap 

95% occupancy at current cap rate 

C  class property at a strong rental market area 

In most scenarios the seller would like to see Proof of funds, and a pre approval from a bank to purchase this complex . At the moment I do not have the credit, down payment and connections to secure financing therefore I would structure the purchase this way :

Tell the seller I would like owner financing for a 5 year period but I am willing to pay more than asking price.

Purchase price $2,100,000

10 % down ($210,000) 

5% interest 

5 year term owner financing (balloon after 5 years and than I would secure institutional financing )

30 year amortization 

Would this entice a seller and would they be willing to go through with owner financing ?

How many of you have tried this approach to secure owner financing and has it worked ?

I have not considered investing in notes , I do not know enough about note investing to take action. The future is bright and I look forward to new investment ideas 

I am in the process of formulating a strategy that can be used to leverage section 8 housing and financing to yield a return over 50% Cash on cash .For the past three years I have been renting my 3 bed 1.5 bath home to a section 8 tenant who is paying $950 per month .The acquistion and renovation costs for the property  totaled $40,000.

Cost Breakdown:

$40,000 property  +cost of  renovation

Expenses:

Taxes $650

Insurance $550

Repairs $500

Vacancy (2.5% of total rent due to low tenant 

Turnover).   $285

Total expenses $1985 / year 

Total rent.  $950/mo

Total rent. $11,400/year - $1,985

 Net $ 9,415

Cash on cash  23.5% 

This scenario does not take into consideration any mortgage but once we factor in refinancing the property and pulling out 70% of value using a 30 year fixed loan at 4.5% we attain a cash on cash return of 39.2%

$40,000 appraised value 

70% cash out 

$28,000 mortgage 

Monthly mortgage payment $142

Yearly mortgage. $1704

Yearly expenses $1985

$1704+ $1985 / $9415(net)

Cash on cash return 39.2 %

  If this scenario is possible through the use of refinancing would someone chime in and give their opinion whether it would be feasible to replicate this using larger funds.

Let's say we are very conservative and pay $50,000 for a renovated 3 bed 1 bath home and rent it through section for $1,000/ mo we can still attain a 18.5% cash on cash return. 

    If we leverage our money putting a healthy 30% down the cash on cash returns becomes 

47.6%

This is my current approach to leveraging the little liquid funds I have to attain the highest return. I would appreciate some advice whether this approach would work and if it would be a solid way to grow wealth in the buy and hold scenario.