All Forum Posts by: Karolina Powell

I believe it is overpriced. I don't have an official NOI from them but basing it on the expenses they provided above, it should be between 45K-50K annually. At 950K that is less than a 6% cap rate so I believe they are asking too much. I would be looking for at least a 6% which would put the price at 800K max.

Nice mixed use property came up for sale practically in my back yard in rural, south of Pittsburgh, Pennsylvania.  10 residential apartments + 3 commercial spaces.  They are asking 950K.

Gross rents: 100,800

Utilities: 3K

Insurance: 7K

Property taxes are roughly 10K for each 450K in value.

Repair/Maintenance: Don't have figures yet but I'm assuming it'll average out around 10K a year.

The lender I am speaking with also requires me to also include an 8% vacancy rate and a 5% management fee whether I have those or not.

With an interest rate of 8.15% and 20 year amortization, I can't get close to a 1.2 DSCR until my amount borrowed is down to about 450K. That with a 150K down payment is only 600K.

Short of asking the seller to carry the note at a lower interest or putting down a much bigger down payment - what am I missing?  Thanks for your help!

I have an agreement with my realtor that she earns at least $2500 per deal closed (I often buy sub100k houses). If the seller offers at least that much or more in commissions then she gets what the seller is offering. If the seller isn't offering commission or the amount is less than the $2500, then I make up the difference.

I appreciate everyone's advice!  At this point in time, I don't think selling would be my best option as I've spent a lot of money on capex items that I would not necessarily immediately get back from selling.  I am only mortgaging 75% of the value of the properties so they are still cash flowing, just not as well.  Jay I'll take your suggestion into account with the next one I refi - thanks for sharing!

I own 7 properties (8 doors) in southwest Pennsylvania free and clear.  I cash flow about 7k a month after expenses.  These are in C locations but my places are on the nicer end of what is available in those locations and my rent is also on the high end.  Haven't had any problems with tenants yet.  I have about 800K of untapped equity.  These places will not have a lot of appreciation.  

I am considering cashing out 3-4 of these properties and using those funds as the down payment on homes in better location - B/A-.  This will better diversify my portfolio and let me add some places that should appreciate nicely.  If I cash out three of them, I can get six other places.  Unfortunately, this will actually bring my cash flow DOWN due to the interest rates.  Take equity out of one property will cost me about 1K a month and with the mortgages on the new purchases, I will probably only cash flow 200-300 per home.  So if I refi three and buy six more - than I lose about 3K in cash flow and only add 2400 in cash flow from the newer places.  This will get better once interest rates come down and I can refi.  

What would you do?

Look at your small local banks.  Here in Pittsburgh, I don't know many brokers that will do sub 100K loans but both the small banks I bank with don't have a minimum.

Yes I accept poor/low credit if everything else checks out and they are current on all of their accounts right now.  Thus far it seems to be working out fine.

Agreed with Owen.  Until you get to a more substantial net worth, you can do without an umbrella as it is unlikely that anyone would want to sue you since most of your home and 401k are protected against creditors.

I pay for it.  I had used Mint for over a decade and now use Monarch Money.  I love being able to search for transactions and keep track of my spending on it.