All Forum Posts by: Luke Cachia

Hi all!
I'm trying not to get caught in the infamous real estate purgatory with the analysis paralysis situation.

I have found a property which I think is an excellent deal. I need advice on funding the deal.
I currently have limited funds (due to the Dave Ramsey pay off debt snowball), so it's making closing this deal a little more difficult.
Here is the deal

Tri-Plex – 11.8% CAP Rate – 20.56% COC ROI

Purchase Price $105,000 ($2,000 non refundable deposit to secure this property)

Current Gross Rents = $1925/month

Expenses = $8328 (Taxes, Insurance, Utilities, Maintenance)

Value Add in expenses by charging monthly fee to tenants for Water and Gas current owner pays and is in above expense.

Washer/Dryer in units.

Top Floor 1 Bed 1 Bath - $650/month - $40 Late fee starting on the 5th of the month

Middle Floor 2 Bed 1 Bath - $725/month - $40 Late fee starting on the 5th of the month

Basement Unit - 1 Bed 1 Bath - $550/month - $40 Late fee starting on the 5th of the month

Rent = $23,100

5% Vacancy = (1200)

Expense = (8,328)

NOI = $13,572

Cap Rate = 11.08%

CoC = 20.56% after debt service of 75% LTV

Returns calculated with $15,000 in renovation expenses once tenants vacate. Each unit will need a nice make ready for new tenant carpet, paint, and may need new appliances.

Does anyone have any idea how I can fund this deal with limited funds?

Thank you so much!

Hi All,

I'm seeing multiple properties being sold on the court house steps well below their appraised value.

For example: A house in Missouri just sold for $150k. After doing the comps (via MLS), the recommended sale price was a touch under $300k.

I don't have the money to put down an initial down payment to a hard lender.

Does anyone know if it's possible for the fee of the hard money lender to be a percentage of the after flip sale price? Using the above example with a 10% fee (one money flip), so the hard money lender would receive approximately $14k after the home has been sold?

@Christopher Phillips

@Charlie MacPherson

Thank for the article Charlie. I'm currently in Australia on a family visit, though I will review the contract upon arrival back in the USA. The information and advice yourself and Christopher have provided has not only helped me in my current situation, though will help me advise future clients!

@Charlie MacPherson I will be sure to speak with the home inspection agency and see what they have to say! Thanks for the response Charlie!

@Christopher Phillips
Thank you for the response Christopher! I had a feeling that may be the case. The attic is a walk 70% of the attic is finished, with a door leading to the unfinished area with the K & T.

I actually had a home inspection on my current home and the K & T wiring was missed. This was before my knowledge and studies of housing/real estate. 

We are now faced with K & T wiring in the attic (it's a 1890 home). Could I have had a case against the home inspector for missing this?