All Forum Posts by: Mo Iacolucci
Mo Iacolucci has started 2 posts and replied 3 times.
Post: DADU opportunity but primary home has tenants & Seller wants buy-back provision
- Investor
- Seattle, WA
- Posts 3
- Votes 0
Thank you both! @Mike Fingleton I would ULS (unit lot segment) the primary house and include a clause in the call option that would prevent them acquiring the DADU. And your point about a lingering HM loan makes sense. I figured I would use HM for the purchase and DADU build. Then sell the DADU and refi the primary back into a DSCR loan.
@Dennis Bragg, how did you factor improvements and market appreciation into the buy-back price? Was the buy-back price contingent on an updated appraisal?
Post: DADU opportunity but primary home has tenants & Seller wants buy-back provision
- Investor
- Seattle, WA
- Posts 3
- Votes 0
Hello! I found a $600k SFH in Seattle on a corner lot with enough room to build a DADU (will sell for $600k). There are two issues (opportunities?) though; (1) there are tenants in the house on a two year lease (payments are enough to cover mortgage payments), and (2) the Seller wants the option to buy back the property in two years. The Seller needs $200k now in order to get out of debt. In sum, I need the land for my DADU, and the Seller needs $200k cash. The Seller has an emotional attachment to the house. I'd need to finance with hard money. I'd like a Seller carried note to cover the down payment for my hard money loan. Thank you!
Post: Requesting rental investment analysis
- Investor
- Seattle, WA
- Posts 3
- Votes 0
Hi- including some analysis I put together for an investment property. It is a duplex property in Seattle. The property needs work, and the outlook on this deal isn't looking too good. But I'd like to come back with an offer. The property is REO and appears to have been purchased by the back for price in the spreadsheet so I don't believe they'll go lower. Any ideas on ways to structure a deal that would give the bank, and maybe a contractor exposure to the outcome (i.e., profit sharing) so that the purchase could go through at a lower price? Otherwise, how does this compare with what you're seeing in N.Seattle area? Any feedback is appreciated on this one.
Google drive link to full spreadsheet
| Cost and Revenue Assumptions | |
| List Price | 550,000 |
| Land | 302,500 |
| Building | 247,500 |
| Improvements | 175,000 |
| Closing Costs | 4,000 |
| Total | 729,000 |
| Number of Units | 2 |
| Average Monthly Rent | 1,800 |
| Other Income | |
| Gross Monthly Revenues | 3,600 |
| Operating Expenses | Yr1 | |
| Electricity | 0.3% | 0 |
| Insurance | 11.9% | 4,900 |
| Water/Sewer/Garbage/ Electricity | 3.9% | 1,600 |
| Property Taxes (On total value of property) | 0.1% | 6,086 |
| Repairs and Maintenance | 5.0% | 2,052 |
| CapEx | 4.5% | 1,850 |
| Professional Fees | 0.6% | 360 |
| Advertising | 0.5% | 210 |
| Other | 1.2% | 0 |
| Total Operating Expenses | 11.8% | 17,058 |
| Expense Ratio | 42% | |
| Net Operating Income | 88.2% | 23,982 |
| Capitalization Rate | 3.29% | |
| Operating Ration | 58% |
| Scenarios | Gain on Sale | Cap Rate | |
| Estimated Exit Price/ Gain On Sale - 1 Yr | -4.7% | (34,000) | 5.50% |
| Estimated Exit Price/ Gain On Sale - 2 Yr | 0.1% | 750 | 5.50% |
| Estimated Exit Price/ Gain On Sale - 3 Yr | 5.1% | 37,238 | 5.50% |
| Estimated Exit Price/ Gain On Sale - 5 Yr | 10.4% | 75,549 | 5.50% |