All Forum Posts by: Jim Gordon

sorry

The best way to think about debt service cost is that it is independant of the operating income of the building. Debt service needs to be figured into your over all operationg costs however. Cap rate is always figured on a cash basis as your loan costs will not be the same as the next guys. There is a great tool to help you figure out all the numbers on the proerty here is the link.

http://www.biggerpockets.com/recritic.html

Good luck sounds like a great find. Is it being delivered fully occupied?

I have heard of this and it is called mortgage fraud.

Aaron you are on the right track. Most people figure it as ARV =100k.
100-30=70, 70-10(repairs)=60. Your walk away from the purchase price is anything over 60k. Don't try to second guess your repairs and try to use cheaper materials it shows when you are done.

Lenny get hooked up with a good agent on your team. Interview a few and the realtor you select may educate you mor than you could ever believe. There are about 60 active agents in my office and only 3 that I would trust (myself included) to really work a rehab purchase. Remember the agent that has property listed works for the seller get your own it doesn't cost you a dime as the buyers agents commision is already figured into the price.

Lets be old school-- in my market a do it yourselfer is the only one trying to sell the property. List with an agent you get 6000 trying to sell it.

You forgot your cost to market and sell the property! I would like to think that putting a sign out front is the way to properly market a home but you need to allocate funds for marketing. If you are going to market it yourself remember to allocate 3% for a buyer agent if a realtor brings someone in addition to your other marketing expenses.

I think that your mortgage broker made an error at your meeting. 6.55 would be a great rate for an owner occupied 100% loan. Taking the property into an LLC incures greater risk fior the lender, NOO greater risk. To offset that risk they want money down and a higher interest rate. See if you can take the loan into your name and then after close deed the property to the LLC. The lender may let you do that.

I think Epicdave was refering to short sales. As a realtor when you have a legitimate short sale and have the property listed at less than the payoff amount you need to include the phrase " subject to lender approval". This is to protect the listing agent and the seller. The bank has agreed to sell the property short but sometimes with multiple liens it can get real sticky. All the lien holders have to come to agreement on the proration of the proceeds. Thus subject to lender approval.

You don't say where you are but in the county that I am in there are 3 area courts and multiple municipal courts. They all require a specific 3 day notice form that varies acording to the court that you are filing in. If you don't have the right form the magistrate makes you start the whole process over from the beginning. Do it right the first time. By the way you can try to find a legal news store in your area they are normally near the court house. They can not help you fill out the form but they may be able to direct you to the correct one.