All Forum Posts by: Shane H.
Shane H. has started 18 posts and replied 169 times.
Post: Triplex Deal analysis
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
Cross posting this from "Buying/selling forum"
Wondering if I can get a few opinions on this potential purchase?
PP $210k
DP $15k
Required roof repair $15k
Inspection currently taking place this morning so unknown additional repair costs
Current rents $2345
Owner paid W/S/G & exterior electric $544
taxes $2200 /yr
Insurance (awaiting accurate quote) estimated $1200/yr
Seller financing $195k at 5.85% 5 year balloon amortized over 30 years with monthly payment of $1150. If not paid in 3 years then required $15k additional towards the principal at that time.
Value unknown as appraisal isn't required. Comps came back anywhere between $150k-$340k.
Current rents are low, property has 2x 3/2 and 1x 2/1. The 3/2's market rent is between $950-$1100 and the 2/1 is between $675-$850. This is really the only way i think this deal would make sense but raising the rents $200+ per unit would likely mean turning over current tenants which would mean additional costs to go with that.
Thank you in advance!
Post: Can I reject a tenant after initial approval?
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
Originally posted by @Ned J.:
If you haven't had him sign anything or hand over deposits etc then....NOPE. You can terminate the oral agreement any time you want. You have no signed contract or $$ exchanged so you are still able to bail...same as if he wanted to bail...
Be truthful but vague..... "after full consideration of your application and my requirements, I feel that this relationship will not be a good fit for either party. I have enclosed a full refund of you application fee. I wish you luck on your continued search".....
Bye Felicia.....
HAHA! yes, this! It'll be the best $35 you've ever spent! (or however much his app fee was)
Post: Triplex analysis scenario
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
Originally posted by @Brandon Sturgill:
@Shane H. First off, nice work on structuring a purchase money mortgage. And ony $15k down!
As simply as I can put it, your ARV is really important here...if you are re-fi' ing out, you're looking at 70% ARV...if you get the purchase price incorrect you run the risk of losing the property to foreclosure (or scrambling to make other arrangements if possible). Get with a good agent (or I'd be glad to plug this into RPR and see what we can find on ARV). Ultimately, spending $600 on an appraisal is better than getting killed on this deal.
A couple thoughts:
insurance on a landlord policy seems low, but maybe not- year built will make a big difference...building materials like asbestos throw a wrench in things...
36-months is probably an adequate amount of time to get situated, but make sure you have reserves in place if you can't
Just make sure you are very familiar with lease terms...adopting tenants has good and bad outcomes...
Keep me posted how this develops.
Thank you Brandon! I made a lot of dials and received many "no's" when looking for an owner finance deal. I think that is partly what may be clouding my judgement on this is how much time and effort and rarity is involved with this deal. The reason i posted on here was that I finally received the income/expense breakdown from the owner yesterday and saw what he pays in Utilities is almost 3x what i had anticipated.
The refi is crucial, and I explained my thought process to the owner who is willing to work on the terms but said he wouldn't go down to $195k PP (Hey, i had to try right?) but maybe he can go down to 200-205k.
The comps I quoted were pulled off an ARV of a 2 mile radius. I'm not opposed to getting your thoughts on one, but full disclosure that one was already ran and the agent didn't really have an opinion. She did say she specializes in buying, not selling though.
Post: Triplex analysis scenario
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
Wondering if I can get a few opinions on this potential purchase?
PP $210k
DP $15k
Required roof repair $15k
Inspection currently taking place this morning so unknown additional repair costs
Current rents $2345
Owner paid W/S/G & exterior electric $544
taxes $2200 /yr
Insurance (awaiting accurate quote) estimated $1200/yr
Seller financing $195k at 5.85% 5 year balloon amortized over 30 years with monthly payment of $1150. If not paid in 3 years then required $15k additional towards the principal at that time.
Value unknown as appraisal isn't required. Comps came back anywhere between $150k-$340k.
Current rents are low, property has 2x 3/2 and 1x 2/1. The 3/2's market rent is between $950-$1100 and the 2/1 is between $675-$850. This is really the only way i think this deal would make sense but raising the rents $200+ per unit would likely mean turning over current tenants which would mean additional costs to go with that.
Thank you in advance!
Post: I just got a $30k quote for a new roof! LOL
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
I am also in the process of getting bids for a roof. The footprint is only 1050 sf but it does have some pitches and complicated pieces. Unfortunately the bids have been all over the place as low as $15k and the most recent being $25k... Needless to say, i am still getting bids... I realize that construction is going like crazy, but i'm sorry, for $25k i could pay two full time guys $25 an hour for 10 weeks and still have $5k for materials. Thanks but no thanks...
Post: Starting a property management buiz
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
@Christine Kankowski What software do you use? is it subscription based or one time? Did you transition into your business while keeping a W2 job or jump straight into it? Thanks!
Post: 24 years old, 35k a year but good saver - do I buy a property?
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
@Ellen O'Neill How is the search going? Have you decided to house hack with a SFR or buy a MFHfarther away from where you currently live?
Post: Is an appraisal necessary/recommended?
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
The Comps are ALL over the place, there just isn't anything similar with the same criteria in a decent radius so they range from $150k-$350k. I'm buying it for $210k. I scheduled inspection for Wednesday and I'm working on getting a drive by appraisal.
Post: Is an appraisal necessary/recommended?
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
Originally posted by @Caleb Heimsoth:
So not a full appraisal but like an ARV?
Post: Is an appraisal necessary/recommended?
- Investor
- Spokane Valley, WA
- Posts 175
- Votes 94
I have an accepted offer from a seller for a triplex and owner financing. I will be getting a rent roll and lease agreements to confirm, but assuming they haven't lied about the rental income then the purchase price I'm getting this property for pencil's out.
Being that it is owner financing, my plan is to refinance it into conventional as soon as i can while avoiding PMI.
I could go into deal analysis if anyone is curious, but I mostly just wanted to ask a cursory question of this. "If the deal makes sense cash flow wise, should i still pay for an appraisal?"
It isn't that i'm not curious what the appraisal would come in at, but I will likely be getting one when i go to refinance in 6-18 months and all the value would do right now is:
1) Give me a more accurate idea of what the bank would value the property at
2) Delay closing as appraisals are 3 weeks out minimum right now
3) If it comes in high the seller could use that info to back out
4) Add additional costs (around $950) to the closing
P.s. - I will still be ordering an inspection.
Thanks in advance!