What's wrong with this deal?
I cant figure out why my investors don't want this deal...can someone shed some light?
The Deal:
6 month old condo duplex
both rented at 800 each..120 each monthly condo fees
units were originally 189,900 for the duplex...one single unit recently sold for 95,000
I negotiated with owners for 169,000
and owner will screen future renters and handle all maintenance and collections for free..the renters in all the units drive very nice cars so they have been screened well
21,000 instant equity and positive cash flow per month...the only thing wrong with this deal is there is no creative financing involved......any advice?
Chris
why aren't you buying it?
I've committed my first steps in rei to bird-dogging...I'm un-employed at the moment and dont have any capital outlay..that is the only reason..but I thought about it
Well I know there is nothing creative you can do- you said that...
but what about a good mortgage broker? Have you talked to one? There are some funny things we can do sometimes.
I have marginal credit at best and no job for 6 months and am closing on my second since losing my job in 2 weeks - a little higher interest, but still a good deal
I'll tell you why I wouldn't touch it. Originally 189K, i.e. each was 95K. One just sold for 95K i.e, no change, no increase. So you get the two for 170K, i.e. 85K each. With resale on each subject to possible costs approaching 6K plus 3 months x monthly mortgage and taxes with no renters (an additional 2400 per unit). I don't see wasting my time and headaches for a measly 1000 per unit.
OMISteve
omisteve..that would be true if you were going to buy and resell immediately...but
1:both units are leased until the end of the year and owner/builder has a 2 page waiting list of renters
2:the growth in my town has grown so rapidly that my house has appraised for over $35,000 increase in the last 5 years..so if you were to buy and hold...I dont see a problem with building good equity in these units..while still maintaining a positive cash flow during that period of time[ Edited by cmon101 on Date 02/18/2003 ]
After all expenses and debt service, what is the monthly cash flow on each unit?