0 Coupon Bonds For Down?
Does anyone have any ideas how I would structure a deal with zero coupon bonds or any bond for that matter, using them as a down since the seller agrees to accept them as down.
I am trying to figure out a way to use the bonds to look on paper as the down to be counted for full face value even if they are not yet.
I have the opportunity to obtain 1.7 million dollar property for about 1.3 million but I need to show at least 100K down for the lender to fund
I appreciate any suggestions you might have
How much could you come up with in cash for the closing costs, if its an apartment and has good cash flow and a decent occupancy rate all you need is 2 to 3% for closing costs.
Good Luck,
Robert
shady disclosure of actual and pro-forma financial by sellers is one of the biggest pains in the but I have run into.
How is one to make an informed choice. If you have an agent, maybe they can apply some presure?
One can never tell what people are trying to hide, on purpose or by omission.
I would ask for some sort of documentable paperwork, tax returns (if not commiting tax fraud), bank deposits, CPA reports.
Good luck.
I would also try to talk to the tenants and get first hand how much they are paying for rents. They will also give you a good indication of vacancies. Based on that information you should be able to come up with an approximate NOI and figure your DSCR to see if this project will cash flow and is lendable=profitable.
Good Luck,
Robert
Also, get a "solid" insurance bid on the place. Buildings with over 24 units between firewalls are tough to insure at a "standard" rate. if their are fire partitions, make sure they are rated sufficiently by the insurer to merit any premium credits that could apply. On such a building, your insurance rate could have a significant impact on your pro-forma(s)...
Best regards,
Tim
I think in situation like yours a possibility is that the owner is sloppy, (because If he was crook, he would want at least some money upfront and would not agree for 100% financing. )
and that may be the reason for non repairs which in turn caused high vacancy. In this case i would go this route.
1. Check the general vacancy rate in the area, this will give you idea as what to expect. after you take over.
2.Buy an option to buy the property within three months subject to right for access for inspection and getting repair bids. If the owner is ready to finance most likely he will accept it.
3.Inspect all the empty apartments, (which owner may not mind )for major repairs. The apartments which are occupied may need cosmetic repairs but may not need major repairs , oherwise they would not rent.
4. Have plumbing heating electrical and roof inspection by contractors. Since most contractors want to have business, they will try most fault with the building. You can discuss those bids with them to understand the major possible cost,
5. Assume the need for all cosmetic work to be done within next three to four years.
6. get some copy of the actual leases and calculate the the possible income. If utility is paid by the tenanats you should be able to figure out out side maintenance.
7.All the above information will help you decide the value of the property and possible cost, so that your bid will be on sound ground.
8. Please give feed back as to what happens so we can learn from your experience too. Good Luck.
The property is in Florida.
Is there a way that I can masked the fact that there is no physical downpayment at closing?
Also, the contract price will state the FMV. [ Edited by shahkarim on Date 05/08/2005 ]
What shape is the building in? Do you have experience in management? Is the price over $1mill?
There are allot of factors involved in getting financing. What shape is your credit in? It may be possible to get financing if you have 2-3% for closing costs, if its the right scenario. It seems with a 11.2 cap it should cash flow decent, but I would need more info. I think you need to keep looking for financing.
Good Luck,
Robert