Apartment Complex
I have a 14 Cap rate
96% occupied
$2M asking price
NOI - 298k
property that I am trying to purchase.
I thought I could go to a hard money lender and get it done since it is at such a low ltv and almost fully rented.
My problem is that my credit is poor and I have little money to put down.
What are my options?
Or bring in a partner who could bring cash or credit or both to the table. IF (and its a big IF) its really a 14 cap. You are sure there is no deferred maintenance, that all the expenses reported are accurate? That the 96% occupancy is also 96% collected? Those sorts of things.
I would not invest in detroit. Look for a property close to where you live so you have some control over it. I use to own two houses in Detroit and sold them about five years ago. I was lucky I broke even on them. There are TONS of abandon houses and especially with the auto industry and the condition its in I would stay away. Its like putting money into an old car that will be worth the same . Dont waste your time. [ Edited by cashcow57 on Date 11/14/2008 ]
Thanks for the reply!
chighsmith example the entire how would be paid in ~ 6mo assume 50% cost.
a much higher return w/ no debt service.
I think you have to be prepared to walk, and understand what those cost might be. Pehaps a holding entity would be appropriate.
cjmazur is right to not have property in your name.
I think you need "boots on the ground" if you are more than 1 hour away from your investment. $1500 and $1800 sounds cheap until you look at total costs. Make sure your Comparable home sales are between 30k to 70k statement is indeed factual, since many houses are not in the same condition as the comps identified on web sites, etc.
I am the "boots on the ground" for my company and know that usually you get what you pay for. Be careful if you have this in your name personally.
and really understand the cost.
I was recently pitched a 295K apt in good condition, then it was disclosed that > 50K in repair/renovation were need.