All Forum Posts by: Jon W.

George, if you are in the Detroit area try First State Bank (thefsb.com). They are local to Macomb County in Michigan.

REI of Oakland has had deals like this posted in the classifieds before where the seller is selling a portfolio of properties at a single price. You could contact the poster to see how the deal was structured. I believe it was an agent. Let us know how it goes.

Good info. Thanks, Joe.

Ned and Jon, thanks for the input. He wanted to pull some money out to invest in another property. As it is, he is just holding it and wanted to try to make it work for him. The income from the new property would service the ELOC. I will have him look into it. Thanks for your help.

I should add that my first thought was that he could not get an ELOC on a commercial property with no income since commercial properties are appraised based on their income. However, this property has great potential income as it is located in the heart of downtown Williamston, MI right on the strip. Does anyone have any thoughts? Much appreciated.

A family member owns free and clear a commercial property that other family uses so he does not generate any income (property was inherited). Can he take an equity line of credit out against it?

Thanks for the direction guys. I guess if I am already questioning the deal, I should not do the deal.

This is a 6 unit multi (1 2bd rents for 650 and 5 1bd rents for 465-535 - motel style building). Sellers say I can add value by challenging assessment (assessed too high) and can convert attached garage to 7th unit (conceptual plans included). Financing throws off ROI given it is a commercial property and shorter term. Historical vacancy is low. I built 8% into my numbers but they claim the average is 5%. All numbers are actual (from seller) except for vacancy, insurance, and PM which are my costs.

What do you think? If I can improve the property I can increase my ROI. Price is firm. I also estimated my interest rate on the loan but have a relationship with a local bank and can get financing. Updates include: newer roof, newer water heater, and 75% of units with new appliances. Blue collar area of town.

Price $175,000
25% Down Payment $43,750

Potential Rental Income $38,760
Less Vacancy & Credit Loss $3,100
Gross Operating Income $35,660

Expenses
Real Estate Taxes $7,860
Insurance $1,975
Repairs & Maintenance $2,414
Hot Water Heater Gas $1,850
Water $2,715
Miscellaneous $300
PM $3,000

Total Operating Expenses $20,114

Net Operating Income $15,546
Cap Rate 8.88%

Holding Cost (20yr @ 7%) $12,216.00
Cash Flow $3,330.00
ROI 7.61%

DSCR 1.27

Hello BP users,
I am a relatively new RE investor but have had a rental for a number of years. I really want to get into some fix and flips so am trying to learn all I can about it. I have read a couple books but think the only real way to learn is through doing.

Does anyone have any tips for SE Michigan?

Thanks,
Jon