| how about a board house for low incomes? |
2009-01-30 22:55:28 |
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I am considering buying a older commercial building and convert it to a boarding house for low incomes, seller is father of one of my business partner, it is now occupy by RE office soon be out of business, location is the best spot in town, cross street is walgreen, nest door is a new Hamilton Inn and Remada Hotel, walking distances to Kroger.
I am thinking to convert it to a boarding house, 18 single room units, all utilities included for $100 to $130 per week, I will have onsite management live there free to overlook things.
Listing price $440,000, I offered $370,000 contract sale, seller financing no money down, 20 year amortization @6%, mortgage payment is 2650.80.
Coldwell Banker
Potential Gross Income Monthly Yearly
one bedroom at $100.00 $7,800.00 $93,600.00
Total Gross Income $7,800.00 $93,600.00
Vacancy
Vacancy Rate @ 10% $780.00 $9,360.00
Operating Expenses
Fixed
Property taxes $650.00 $7,800.00
Insurance $200.00 $2,400.00
Variable
Property management
Maintenance $600.00 $7,200.00
Legal Fees
Accounting fees
Advertising $125.00 $1,500.00
Administrative expenses
Extermination
Landscaping
Trash Removal $94.00 $1,128.00
Pool/ Recreational area maintenance
Utilities
- Sewer $300.00 $3,600.00
- Water $375.00 $4,500.00
- Cable $60.00 $60.00
- Electric $1,400.00 $16,800.00
Total Expenses $4,584.00 $54,348.00
Net Operating Income $3,216.00 $39,252.00
Mortgage
- First Mortgage $2,650.80 $31,809.60
- Second Mortgage
Profit or Lost $7,442.40
Reserve for Replacements
- Roof $2,000.00
- Siding $500.00
- HVAC units $500.00
- Water heaters $500.00
- Appliances $500.00
- Paint $500.00
- Windows & Doors $500.00
- Electrical system $500.00
- Non-carpet flooring $500.00
- Parking lot $500.00
Total Reserve $6,500.00
Net Proit or Lost $942.40
Ratios
Debt Coverage Ratio 1.23
Cap Rate 10.61%
Cash on Cash Return 74.42%
Break Even Point On Units 14.77
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| New prospect- 13 unit asking 550k 续 part3 |
2008-07-18 09:20:12 |
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New prospect- 13 unit asking 550k 续 part3
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5 month after closing on the property, with new round of tenant change and rent increase, monthly rent now at $7030 per month, increase from about $4800 when it was with previous landlord, expected vancancy down to 5% compare to previously expected 10%, positive cash flow expect to be $22,321 this year.
Part 1 here http://web.wenxuecity.com/BBSView.php?SubID=tzlc&MsgID=32461
Part 2 here http://web.wenxuecity.com/BBSView.php?SubID=tzlc&MsgID=50153
13 unit asking 550k, after a month long counter and couter offer,final accepted price 456k, 56k cash down less tax credit and deposit, 400k owner finance at 7% amortize over 20 years, 5 year balloon.
Gross Income (Year) $84,360.00
Vacancy
Vacancy Rate @ 5% $4,218.00
Operating Expenses
Fixed
Property taxes $7,800.00
Insurance $4,121.00
Variable
Property management
Maintenance $6,000.00
Legal Fees $200.00
Accounting fees $800.00
Advertising $300.00
Administrative expenses $200.00
Utilities $1,200.00
Total Expenses $24,839.00
Net Operating Income $59,521.00
Mortgage
- First Mortgage 20yr@7% $37,200
- Second Mortgage
Profit or Lost $22,321 |
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| submit an offer on a REO, part 2 - Done & Rented. |
2008-07-17 19:33:02 |
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Offer was summited 03/04/08, Closing was 05/03/08 (took 60days for title work).
purchase price 30k less 1k in tax credit, remodeling took 5 weeks, remodel budget was 12k, but it was over run, had to replace furnace, and a new well, which was not in my estimation.
the house was a 2 bedroom, I repartition it to a 3 bedroom, replace most of drywall, all new entry doors, all new paint, new floor covering, new bedroom fixture, total cost 21k.
lease signed today, rent is 725 per month, tenant is a hospital X-rate technician, 2 small children, income 38k a year, good referents.
total project cost is 29k closing plus 21k remodel, total 51k, market value 98k, next step is cash refi for 70% LTV at 68k, this will be a challenge due market condition, in the past, cash out refi requires 6 month seasoning, but no one knows what will happen next 6 month.
Original post on 3/4/08
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got a call from a realtor today about major reduction on a 2 bedroom cottage with lake easement, this realtor specialize in REO and HUD, I usually get the listing before it hit the market.
this property is a 2 bedroom cottage converted house, detached 2 car garage build in 1999, new well, new septic, some new windows.
Tax access value at 96k, bank foreclosured sherriff sale is 98k, bank own on the market 119 days, first reduce to 72k, then 54k, today is 35k, submit offer at 29k, exit if over 32k.
it will take some drywall repair, plumbing and heating, painting, carpet, about 12k.
I estimate market value at 90k, will cash out refi at 70% is 54k, less repair and downpayment total 42k, profit 12k for my time.
Rent expect to be at $650, mortgage payment$360, insurance 40, tax 40, possible cash flow $200 per month. |
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| Submit an offer to a REO, Part 1 |
2008-07-17 19:24:57 |
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Submit an offer to a REO [编辑] [引用]
jy101
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第1楼
2008-03-05 05:53:58
got a call from a realtor today about major reduction on a 2 bedroom cottage with lake easement, this realtor specialize in REO and HUD, I usually get the listing before it hit the market.
this property is a 2 bedroom cottage converted house, detached 2 car garage build in 1999, new well, new septic, some new windows.
Tax access value at 96k, bank foreclosured sherriff sale is 98k, bank own on the market 119 days, first reduce to 72k, then 54k, today is 35k, submit offer at 29k, exit if over 32k.
it will take some drywall repair, plumbing and heating, painting, carpet, about 12k.
I estimate market value at 90k, will cash out refi at 70% is 54k, less repair and downpayment total 42k, realized profit 12k for my time, unrealized equity 36k.
Rent expect to be at $650, mortgage payment$360, insurance 40, tax 40, possible cash flow $200 per month.
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| New prospect- 13 unit asking 550k 续 part2 |
2008-07-17 19:13:10 |
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13 unit asking 550k, after a month long counter and couter offer,final accepted price 456k, 56k cash down less tax credit and deposit, 400k owner finance at 7% amortize over 20 years, 5 year balloon.
Gross Income (Year) $77,400.00
Vacancy
Vacancy Rate @ 10% $7,740.00
Operating Expenses
Fixed
Property taxes $7,800.00
Insurance $4,200.00
Variable
Property management
Maintenance $4,200.00
Legal Fees $200.00
Accounting fees $800.00
Advertising $300.00
Administrative expenses $600.00
Utilities $600.00
Total Expenses $26,440.00
Net Operating Income $50,960.00
Mortgage
- First Mortgage 20yr@7% $37,212
- Second Mortgage
Profit or Lost $13,748
Ratios
Debt Coverage Ratio 1.37
Cap Rate 11.75%
Cash on Cash Return 24.55%
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