All Forum Posts by: Michael Hanson
Michael Hanson has started 1 posts and replied 3 times.
@Jorge P. so we have it set that the utilities are paid by the tenants including water. As far as the mortgage payment that reverts to my initial question of financing.
Just looking to get input on if someone has been in the similar situation of a muti unit property just starting out and if they would recommend a hard money loan or going with a private investor getting something like a 20 year loan with a 2 year balloon payment where you would refinance with a bank after proving positive cash flow for those couple of years.
How so? Again very rough calculation on a monthly basis
Rental Income: 1,100 2 units @ $550
Taxes: (40)
Insurance: (50)
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Vacancy: (105) 10% of rental income
Repair/Maint. (52.5) 5%
Cap. X (52.5) 5%
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790
Again that's not taking into account a debt service charge (payment on a loan) because I'm not entirely certain how I should obtain funding, which reverts to the overall question of obtaining a hard money loan and refinancing or continue pursuing actual private funding.
I've been interested in getting starting dealing with investment properties for a few years now and about to pull the trigger on a property after hundreds of analysis. Before I start work full time at a large accounting firm I dedicated my summer working at a real estate investment company to learn the ropes. Now that I have finally found the perfect rental property I'm trying to get the proper funding. As being a recent graduate with no history in the business "per say" you can imagine the sort of rates I'm getting from a traditional lender.
I realize this question is posed multiple times but wanted to see if there was anyone whether currently in the same boat or has experienced this to lend some insight. Basically the breakdown becomes:
Loan amount: 30,000
Budgeted Fixed Costs: 5,000 to 6,000 (funded by me)
Net operating income: $790 (after taking out vacancy, repairs and cap x)
Would it make sense or be advantageous to take out a hard money loan right off the bat and refinance a bit down the road to pay off the hard money loan? Or keep attempting to find private funding through family or friends?