First Time Investing - Help
Hi, Im new to the world of inventing and looking forward to close my first deal. I studied the basics but not sure about few thing when it comes to actually doing it so I thought I ask for help.
Im working on a 60-unit apartment asking for $1.8M and NOI of $180k. All units are section 8 and have 2 year contract with govt.(looks like cant raise rents for 2 years), fully occupied. The information here is only from flyer.
Here are what Im thinking now.
1, Go with $1.78M or $1.8M but ask seller to carry 70-80% for 3 years. Refinance using FHA loan and pay back seller.
Problem : dont know if seller will carry 70%. Also dont know if I can get refinance with FHA loan
or
2, Negotiate the price as low as I can and use conventional loan.
Problem : I heard that banks are not giving out loans if you dont have management experience.
3, Any suggestion?
From the information I have now, the building is quite new and occupancy is good. I dont see anything that makes my negotiation easier. Is the section 8 thing a positive too?
Any advice/suggestion is appreciated..
I just found out that the seller needs money for his next investment. I guess I cant ask for owner finance.
By the way does anyone know how long would it take to get an FHA loan?
For my company, S-8 is like a tool. Applied correctly, you should see good results. My history is using the S-8 voucher program exclusively, and therefore I have probably misunderstood the context of your response(s). My company does not have "Section 8 projects" that serve only S-8 tenants. We pick and choose our tenants and are allowed to screen them individually and are not mandated to rent to only S-8. That changes the equation, and so I retract the comment "CashNowUSA has some misunderstandings of how S-8 works."
Getting back on topic, I think we can agree the original poster, quarter, should not pursue this deal.
Thanks everyone. I decided to walk away from the deal but learned a lot from it.
Hopefully I can find a better deal next time.
Cap rates vary according to local markets. You might contact several appraisers in your area to get their input.
Good luck.[ Edited by bargain76 on Date 02/05/2010 ]
This website is a good start.
Loopnet
linkedin (there are many groups you can join)
May be interested in JV. If property is available, contact **Please See My Profile**
Gino,
Thiat appears to be a great rate. Your cost per thousand seems low, even at actual cash value. Do you mind sharing which insurance company this is?
JS.