All Forum Posts by: Venkat Raghavan

Tks Shawn... I hd to take 'coz my friend consulted wiht the attorney and they forced him to take one...so i m bitting my tongue and spending another 100 bucks

Hello BPers,

I am in the process of purchasing a rental unit for 62k and I am having a friend of mine finance it (Deed for 40k). He is not too adamant with the title ins, unlike lenders.

Since I am going to get a title insurance for full worth of the property 62k, shoudl I take another policy for 40k ?? wouldnt owners title ins policy protect 62k and when incident happens and ins. co. pays out, 62 gets paid and I pays off his lien ?

Pls answer - Closing is on Monday and I need to solve this before Friday.

Thanks
R

Thanks to you both - so I will consider all your pointers and re-evaluate and start low.

@UWE - No its in NJ and no in OH.

Simply put... if you pay off the mtg, you have a
*Stuck in Equity doing nothing
*You don't get tax breaks on interest
*You are not LEVERING UP.
* Missing the boat big time - you are getting cheap money from banks...borrow as much as possible and lock it for as long as possible.

Hey BPers,

I am looking at a 16 unit 2BR 3BR - which need at least $330k in rehab. Currently vacant.

rental income in the area goes for b/w 900-1100.

I was told I should be using income in the last 6 months to run the NOI and use the market cap rate to find the Purchase price...

Its vacant and in need of work - What should I submit the offer for ?

Still working on Financing wiht private folks... just in case if you guys have any other idea to fund this deal ?

Ussual..

1) ask for seller financing
2) Master lease option
3) Private money (not hard money)
4) Partnership
5) Get the first from bank/lenders and second from seller...

Good ?

Inc Income Idea #2
Ok you guys are thinking of doing a room rent instead of house rent. To go further to increase your rent, do a weekly room rent instead of month room rent you would make more money

so 600 per month will look like 150/wk but without any increase, you will make $600 more per year

=>150/wk *52 weeks = 7800 vs 600/m * 12 = 7200

But you increase the turnaround rate as someone might windup after 3 weeks and you are short the 4th so you always tell them to give 2 weeks notice and you jack the price up from 150 to 180 or so...

Inc Income Idea #3
Find lower credit guys and tell them you can work with them if they give extra deposit 2 months instead of 1 month and because they have such a bad credit you charge a premium to compensate the risk.

But with all this you introduce more risk and uncertainty leading to more prop management headaches.

Nice Idea - I dont think that shoudl be a problem - think of the LLC that is going to get the $flow in as a management entity you have - which is setup to collect rental and pay the maintenance out of it etc. Legally that shouldn't be a problem (check with attorney, I am not..) and I think its good for asset protection as your mgmt entity will hold the rental where as your primary entity will have a huge debt so that helps you with the asset protection.

On a diff note.. why do you want to have the $flowed into this entity. For credit building I dont think you need to show cash coming in - as far as I know you need to get the credit and pay on time or may be 10 days before so the creditors will report to D&B and eqf

Its a 4 story - 4 unit per level = 16. This has a basement and possibility for laundry hookup - where the neighboring property which looks exactly same has one.

Mostly these are 2 and 4 BR apmts. - Exterior needs very little work as its all brick - not the brick face but the real brick. Interior has hardwood and some carpet - Majority of work is in kitchen to put in some new cabinets and some finishing touches. Roof was worked on the prev llord and needs no work for next 5 yrs.

Oil - Gas convertion for heating is major but thats a day-2 work. This was rented but prev. LLord cleaned up the building to renovate but not sure why is he selling now...

I see some recent sold transaction for 300k (forecloured / purchased) 'coz prev llord had bought this for 800ish and couldnt pay the mtg., so it went into f/c.

Rents in the are are 1000 for 2br and 1200 for 4br -- this is lower than the median for that market.

Tks,
Venkat

Thanks for all your comments! I guess I will have do to more research and n/w.

@Joel, I want to be in Commercial too - It's better to have 1 - 40 unit, instead of having 40 SFR spread out and my mgmt guys are constantly running bk and forth if some need constant maintenance.

For me to get a decent multifam, I need to buy and reposition which I am ready to. But because these properties with currently poor prop mgmt comes with < 80% occupancy its tough for me to get the financing... I know its a catch 22 situation.

I am currently looking and talking to, for a 16 unit in NJ - :Stats: 16 Unit, 0% occupied., oil heating - 1920s brick,exterior good, interior need some work totalling 50 -100k, Asking 580k but is motivated and I think we can get it for 400ish...I have lined up some cash for d/p, improvements and reserve for 6 months. How dya think I can finance this prop?

Thanks again!
Venkat