All Forum Posts by: Rob Krach

Good Luck today @Will Barnard!

@Justin Pillion No it is not, slightly Northwest of Chicago

@Joel Florek I haven't even taken it as far as viewing the property as I had a feeling it was thin and then @William Hochstedler pointed out some great stuff and I have already moved on to analyzing and looking elsewhere.

Thanks All for your comments and advice,

Rob

@William Hochstedler

I sincerely appreciate the response, what you stated makes sense and I did 100% forget about the MIP.

One of the biggest changes I am making in my life this year compared to last is that I am doing anything I can to further my real estate career and even if all I accomplished in the day was an analysis of a deal it is something, so on to the next but with year 6 in mind.

Thank you sir!

So my current situation is:

$480 a month for rent plus $60 in utilities

I just analyzed a deal and am curious if this makes sense or if I am missing something:

Here is the deal and the numbers:

Offer would be $185,000, FHA Loan used with the welcome home IL program giving me a $5,000 to help with closing costs and down payment at 0% (for all intensive purposes lets just say that's tacked into the loan and un accounted for other than the all I will need to bring to closing is the $1,000)

my mortgage would be 30 years at 4%

My offer would include the below:

5% seller contribution to closing costs and down payment (FHA allows for 6% of the purchase price, but if I am wrong please correct me)

it is a 3 unit with 2 2beds and 1 3 bed

currently the taxes are $3,100

I guesstimated insurance around $1,550 (no clue seemed decent considering my experience)

current rent from the two 2 beds is $1,100 and currently i live with two roommates who would move in with me to the 3 bed, (each of them currently pay $480 for rent and $60 for utilities) if I offered them $250 - $300 a month plus we split utilities for our unit 3 ways they would jump on that offer)

if I guess that my total income will be about $1,600 a month and my expenses for PITI would be about $1,250

with the above I am making money and saving my $480 but now when I take into account Vacancy / Cap Ex / repairs / prop management (even though I will be managing this) I am guessing I would be negative about $150 - $200 (income = $1,600, expenses around $1,750 - $1,800)

Providing I live here for 3 - 5 years is this a deal worth considering?

What am I missing?

What did I do wrong in the aforementioned scenario?

A future thank you for the advice and comments,

Rob Krach

@Aaron Mikottis,

Just curious, were you able to get the 5k with the 203k loan?

Any pictures, i would love to see the before and after?

Thanks and congrats again,

Rob

@Aaron Mikottis,

What lender did you use to get the grant plus the 203k.

I went through the entire list of lenders that offered the grant, found out which ones offered 203k and then was told by every single one of them that i can't combine both.

I will apply tomorrow for this if you can help me get a lender that does both.

Congrats and thanks,

Rob

sorry issues with the posting

@Pat G., @Brandon Hicks, @Joel Owens, @Account Closed I sincerely appreciate the responses, and you guys have given me a lot to think about.

I had a feeling this is not the greatest deal as it stands but at the same point I had to take a stab at making offers and finally taking action and to be honest I am learning a lot from just going after this multi family stuff in the past 2 weeks.

The sellers broker is the one who helped come up with the list price and i don't think they took expenses into account when determining the value.

with a sales price of 525k if i got my total expenses down to that $31,500 annually including taxes, insurance, payments to the seller would that then be a good deal at the 100k down payment, obviously i will attempt to get that lower.

again,

thank you so much for your help and insight.

Rob Krach

Mike,

My goal in posting this here is so that BP members can help me look at it in a way I wouldn't, if people give me reasons not to buy then it is just that an iffy deal but if i find a deal and people on BP can't think of why I shouldn't pull the trigger, then that's the deal I am going to go full steam on.

Thank you for your feedback,

Rob

Hi All,

There is a 6 unit complex that I made an offer on and the owner came back with the below counter as the owners are old and ready to retire:

Purchase Price of 525K

Down Payment of 100K

The Seller would Carry the financing for 2 or 3 years

Fixed $2,250 a month payment to the seller

and a purchase price at the end of 2 years of $371,000 or at the end of 3 years of $344,000.

It is fully rented and updated through the 90's / early 2000's so it isn't in the worst of shape but not the prettiest building in the world.

The Numbers are below:

Rent: $5250

Taxes: $12,000 annually

Insurance is $2400 (this is the quote I was provided)

What is my best approach, I can't afford 100k, I have 10k, do I lock this up after performing due diligence and then wholesale it?

What due diligence do I perform?

What am I forgetting?

Do I go to every single bank Online and Physical in an attempt to get the funds?

Thanks all,

Rob Krach