Is This A Deal - Leased Quads With 0 Down And Positive Cash
I am in the Atlanta area and currently looking at some Town home properties - 4 to a building (Quads, I guess, but they are titled as seperate townhomes). The deal I am being offered is 100% with about $750 a month in Positive Cash per building after PITI (4 units). The 3/2.5's (2 per building) go for $925 and the 2/2.5's (2 per building) go for $725. All are fully leased. Priced at $360K a building, stated FMV at $440K (not confirmed yet). Property management is over and above at 5% of gross.
You may consider flipping the property and selling each unit individually. Check comps to see what they are going for in the area.
I am assuming that since each unit is already separated the requirements that all utilities, including water, has already been separated so really the only expense that you will have is garbage, lawn, and snow. You will have insurance, property tax, rental housing certificate fees, advertising, and maintenence. Get those numbers into your calcuations. It seems like a good deal!
How are you getting the 100% financing? Is this a deal through the builder or through a normal lender? I'm just curious.[ Edited by myfrogger on Date 05/15/2004 ]
Owner is liquidating 23 of these quads in a complex. Units are maybe 10 years old, but within a few miles of a new mall that opened about 18 months ago. Owner is arranging 100% financing including the owner taking back a second.
Have not tried to negoiate yet, but I am thinking of working towards $82.5 per units, putting average rent at 1% of purchase price.
Property management is set up at 5% with first 6 months free.
All units are leased and owner will guarantee first 60 days in case any tenants wants to vacant with ownership change.