Posted 10 November 2004 - 03:48 PM
According to the spreadsheet I am using, Which I got from my banker, if I fully financed the 1.1 at a rate of 7%, assume 10% vacancy, 5% for management, and 5% for improvements, along with all the other numbers (Taxes, insurance, maintenence) at the end of the first year it makes $5500. (1 of the units is under a 3 year contract, the others are all month to month - which does make me a bit nervous but I know the area and renting, at least the residential spaces, shouldn't be a problem.)
Overall, I guess I want to know where can I find a financial institution that would assist me with this? Also, I would like people to start punching holes in my numbers. I would rather my hopes be dashed now rather than later when I have a 1.1 million dollar debt over my head.
Posted 10 November 2004 - 10:59 PM
I guess I want to know where can I find a financial institution that would assist me with this? Nope, I dont think you will get 100% financing. There could be 90% financing offered by some non-mainstream lenders, but there has to be some equity involved. Assuming 7% on the loan is probably not based on reality due to the impossibly high loan-to-value. The risk is much higher for a theoretically 100% ltv loan compared to the industry standard 80% ltv.
Also, I would like people to start punching holes in my numbers. $5,500 profit on a $1.1 million property? While your reserves, management and vacancy numbers seem conservative, there just isnt any cushion there. If you want some more feedback, give me actual rental income broken down by unit, and detailed operating expenses.
Posted 26 November 2004 - 12:25 AM
Be VERY careful....i see it all the time...someone as u said 'finds a building' and is so hell bent on getting it that they loose their objectivity. Ur goin about it the right way, better to kill it now than realize a mistake when you are between lunch and forbearance.
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