All Forum Posts by: Daniel Lorence

Hello, I've got a pre-market deal in Berkeley that I'm trying to crunch the numbers on to give the real estate agent an offer. It's a four plex that has 3 unit's rented out getting about $1400 rent per unit. My friend is in one of the units and is planning to give me his unit if I buy the property, so I'd have 2 unit's and probably live in one and rent the other out. (all are 1br units, market rate about 2k/each)

I talked to the real estate agent and he said he's trying to get between 900k-1.2M, which I think is absurd given the rent controlled units and that the building isn't in the best shape. I know the landlord and I think he might give me a good deal. I'm trying to figure what is a reasonable offer price for him. See my spreadsheet below. I'm wondering if $769k is too low or reasonable.

Any Advice is appreciated

Thanks

Hey Ori - They converted it to a metered fourplex, but it's legally a duplex. It's also zoned as a duplex, so I don't think there is going to be any way to legally permit those 2 additional units. I talked with my real estate attorney and he said this might be a problem when refinancing. So with that information & the current bids I see this as too high of a risk. 

Did you end up bidding on this?

Best!

I just found a fourplex in Berkeley, CA that is going up for Auction this weekend. I'm very interested in it, I'm just trying to figure out if these numbers make sense and where I can get the cash before I refi.

The starting bid is $350k, but I think it's going to sell for at least 600k. From the 4 units total it's currently getting $4,230/month in rent. (Note that Berkeley is a very strict rent controlled area, so I don't that I'll be able to raise the rent more than 5-10%/year.) I'm thinking I'll move into one of the units too, so the monthly rent income will go down.

I used this property alalyzer worksheet from bigger pockets/chandellier properties, and it's barley braking even if I bought this at 450k with all of the units rented out. Am I doing something wrong or is this deal just not worth it? I' m not sure if the payment numbers and "Add back: Principal payments" numbers are correct. Can someone please look at this for me?

Also for these auction properties what do I need to put down as a down payment? and How fast after the sale do I need to pay them? Any tips on finding a lender to initally front me the cash before refi?

Property Analyzer Excel

Thanks,

-Daniel