All Forum Posts by: Ian Hess

So here are the numbers provided by the seller.

12 units

Gross rents 88,700

All expenses 33000

Asking price 1,050,000

When figuring NOI, do you use the actual income from the year previous or what they say -10%?

I am figuring the cap rate is bout 4%

Hey BP!!   I have been a real estate investor for a little over a year now when i purchased a four plex. It has gone pretty well and I am now ready to move on and purchase some more units. I just found someone selling three 4-unit buildings (12 units total). He is asking 350k for each building and it is buy all three or none. Just from questions asked to him briefly, 2/3rds of them are updated and the others are not. It also seems like the management is poor and the rents for location are pretty low. I think there is really good room for increasing my equity and cash flow from the get go.

My real question comes down to how to fund this?  I know a lot of people are 100% financing this sort of thing but how do you do this.

Do I do 1 commercial loan, 1 personal loan, or three personal loans, or something else?

How do you overcome your fear of taking out a million dollar loan?

How do you determine whether this is a good deal or not? Cap rate or cash flow or both? Or neither?

I can provide better numbers tomorrow when he sends over the financials.