All Forum Posts by: Seth Williams

Seems like short money, put enough contingencies in ( subject to approved walk through, inspection financing etc ) and I wouldn't be worried about tying up the cash, seems like short $ for good rents. 

Why are you paying for them if they are separate? What am I missing here. Can you just have them pay for it? here in mass as long as things are separate and they can have their own utility bill they pay it. If its one system, the landlord pays it.

In my experience electrical heat is far more expensive. 

@Zachary Feldman, they are assessed at purchase price within 2 years, and the rate varies annually of course. The tax rate right now for res is $10, and commercial is $25 per 1000 listed in the MLS / online. However, during underwriting they seem to always take into account the old tax, not the new tax.

Jason, I've done a few deals like this in the past. I would recommend 2 things. 1) Try and lower the down payment required by doing a second mortgage with a short term balloon. I structured a deal like this was a 25k balloon due in 3 months and it let me save all the rents from a few of my properties to pay it down, but let me use the prop because we closed on it... make sense? 2) You'll have to get a business partner and do some syndication style deals. If they have the capital but want a passive investment you can keep a lot of the equity, remember, you'll be offering way more $ in return. 

Other option would be leveraging another property and doing a portfolio loan, they can cross collateralize sometimes and then you can literally put nothing down, because there is no point in owner financing the deal if you are putting that much down. Id work with the seller. They can't demand that $ down, and owner finance and get the interest too, you know what I mean? They should be at less than 15%, or 10%, down, maybe that second mortgage and move on. Plus, the seller when they owner finance get to realize everything annually in cap gains, its probably better for them and they will be making more passive income from you that way. 

my .02$

@Justin Repp can you email me? Is this on MLS? [email protected], Im in Boston and have a few people that would want this.

To be clear, thats cash flow with limited reserve, with the reserve and bills like your planning you are right, its only an equity play. 

My rough analysis said it would be around 1k a month cash flow, and a decent cap rate. If you hold in an LLC which you more than likely would with limited money down ( you can still put as much down as you want ) but you get to close with no or low money down since its owner financed. If it makes you money here, id still do it. Just know there isn't much of an exit strategy without the info I mentioned above ( extension on the loan if need be ). I look at these deals a little different because even at a "break even" play, you'll have a good amount of equity from the tenants paying the property down for you, and then can sell and make it all back, for free. I think portland will continue to go up, I've watched the market a bit being in boston. If you can buy conventionally ( FHA or something if its your first deal ) You might want to do that too so there is an exit strategy right off the rip, that being said, you can still do that and get this because its owner financed. Put me in touch, ill buy it if you don't :)

Also, the oil price seams low, and your gas seems high, but could be me. 

Is he going to owner finance the whole amount? What will you have to put down? Whats appreciation like in this area? Any time you can acquire a low maintenance property thats in good shape with stabilized rents, and you can OWNER FINANCE IT? I would pull the trigger all day, An easy rule of thumb if rents ~1% of total purchase price, assuming 363k, its a no brainer. Especially with owner financing, low / no money down, I wouldn't be worried about the balloon. At a 6.5% rate you'll prob have enough equity to hopefully exit through refinancing, or take the cashflow and sell. Id do two things....

1) negotiate a better rate, say 4.5 or 5%, usually in these types of deals you do "your price, my terms"

2) Negotiate a way to extend, but at a higher rate or something incase of depreciation. You don't want to get stuck losing the property in 5 years if it cash flows, work something into the deal that you can extend. 

Looks like you'll pull an 8-9 cap rate on this, even at 100% financed, so...BUY IT

This is how I structured my owner finance deal. 

@James Federico Shoot me a message I'm interested if this is avail.