How does it appraise? For an out of state investment ALWAYS visit the property before hand. You should be able to verify his schedule by talking with the tenants. You might save yourself a trip and call them. If they are unavailable by phone, you might hire someone to go over and check the place out. A home inspector might do it along with his inspection. You might also find a RE management company or RE agent to check it out for you.[ Edited by groverm on Date 05/21/2006 ]
Thanks for the response. No appraisal done on it. The RE agent did pics and talk with one tenant who verified what he knew. Good idea to check with tenants since the contract has a rent roll attached. Most are not long term tenants all rents are paid weekly. So on what basis would you buy it?
[ Edited by personalvoice on Date 05/21/2006 ][ Edited by personalvoice on Date 05/21/2006 ]
Groverm,
You would buy the property on the basis of the average net income. That is my concern (2 units are vacant 1 over 7 months, 1 just recently) You would go by what the owner states?
The cap rate calculated using the brokers dscr calculations comes out to be 12%
Expenses including mgt @10% maint @10% totaled to 53%. 5 times the scheduled net of 20,434=102,107 which is less than the price of the property.
Yes we spoke about mgt of a property.
gpk
City stated property taxes all paid up. My concern is no documentation of income aside from a stated rent roll.
No title report as of now. His FIT are not a big concern just the actual income and expenses. Aparently you would not buy based in his stated income?
Quote:
On 2006-05-21 13:51, personalvoice wrote:
Groverm,
You would buy the property on the basis of the average net income. That is my concern (2 units are vacant 1 over 7 months, 1 just recently) You would go by what the owner states?
The cap rate calculated using the brokers dscr calculations comes out to be 12%
Expenses including mgt @10% maint @10% totaled to 53%. 5 times the scheduled net of 20,434=102,107 which is less than the price of the property.
Yes we spoke about mgt of a property.
Rent might be increased. Also, I would move from a weekly rent to a monthly rent. My guess also is that this property will needs a good amount of work to make it profitable.
Thanks for all the feedback. It looks like this property is not going to be bought by me. So for my first almost deal it hurt to give it up but it is worth it. Will keep on looking.
This is as close to no money down as it gets. You will still have to cover some closing costs...appraisal, doc stamps, taxes, etc...unless you have the seller paying for your closing costs. There is no such thing as a true no money deal. You will always have to front up something.
One other reason to avoid purchasing the corporation is that you are also purchasing the liabilities of the corporation, whatever they may be.
Has the corporation been involved in any disputes, illegal activity or lawsuits? Any other business ventures? How can you get a clear title and a title insurance policy for the park land if you buy the stock of the corporation?
[addsig]
How does it appraise? For an out of state investment ALWAYS visit the property before hand. You should be able to verify his schedule by talking with the tenants. You might save yourself a trip and call them. If they are unavailable by phone, you might hire someone to go over and check the place out. A home inspector might do it along with his inspection. You might also find a RE management company or RE agent to check it out for you.[ Edited by groverm on Date 05/21/2006 ]
Thanks for the response. No appraisal done on it. The RE agent did pics and talk with one tenant who verified what he knew. Good idea to check with tenants since the contract has a rent roll attached. Most are not long term tenants all rents are paid weekly. So on what basis would you buy it?
[ Edited by personalvoice on Date 05/21/2006 ][ Edited by personalvoice on Date 05/21/2006 ]
Groverm,
You would buy the property on the basis of the average net income. That is my concern (2 units are vacant 1 over 7 months, 1 just recently) You would go by what the owner states?
The cap rate calculated using the brokers dscr calculations comes out to be 12%
Expenses including mgt @10% maint @10% totaled to 53%. 5 times the scheduled net of 20,434=102,107 which is less than the price of the property.
Yes we spoke about mgt of a property.
gpk
City stated property taxes all paid up. My concern is no documentation of income aside from a stated rent roll.
No title report as of now. His FIT are not a big concern just the actual income and expenses. Aparently you would not buy based in his stated income?
Quote:
On 2006-05-21 13:51, personalvoice wrote:
Groverm,
You would buy the property on the basis of the average net income. That is my concern (2 units are vacant 1 over 7 months, 1 just recently) You would go by what the owner states?
The cap rate calculated using the brokers dscr calculations comes out to be 12%
Expenses including mgt @10% maint @10% totaled to 53%. 5 times the scheduled net of 20,434=102,107 which is less than the price of the property.
Yes we spoke about mgt of a property.
Rent might be increased. Also, I would move from a weekly rent to a monthly rent. My guess also is that this property will needs a good amount of work to make it profitable.
Thanks for all the feedback. It looks like this property is not going to be bought by me. So for my first almost deal it hurt to give it up but it is worth it. Will keep on looking.
Ok, I see what you mean. Is it possible to structure the loan so that I get $60k-100k at closing?
The seller is selling each unit (4) for $175,000
Can I offer $190,000? and get the $60,000 back at closing?
This is as close to no money down as it gets. You will still have to cover some closing costs...appraisal, doc stamps, taxes, etc...unless you have the seller paying for your closing costs. There is no such thing as a true no money deal. You will always have to front up something.
Do it as a 1031 exchange. I would only do the transaction if I had multiple corporations holding real estate.
One other reason to avoid purchasing the corporation is that you are also purchasing the liabilities of the corporation, whatever they may be.
Has the corporation been involved in any disputes, illegal activity or lawsuits? Any other business ventures? How can you get a clear title and a title insurance policy for the park land if you buy the stock of the corporation?
[addsig]