Is this a good deal - Posted by antoni25

import · January 13, 2003, 6:57pm

Posted by Charles Clark on January 13, 2003 at 21:28:01:

Is it positive cash flow if you have “bad luck” and the vacancy rate ends up being 25%?
If all that was considered in granting a loan, you can get 100% financing based on your FICO score, but there is SO much more involved that just that to get a 100% loan.
As far as if it is good deal, I can not tell you, but hopefully some one else can advise you on that.
Charles Clark

import · January 13, 2003, 6:57pm

Posted by antoni25 on January 13, 2003 at 19:57:45:

Hi,

I am a new investor and i come across landlord that want to retire. he wants to sell 2 fourplex (1 bd and 1 ba) and 2 duplex (3/1). The asking price is 950K and the comp in that area is around :

300-350K for similar duplex
220-250K for similar fourplex

The gross income is 138,500 per year and currently his expense including tax and insurance is about 22,000. I know that tax will increase once i buy the property maybe by extra 12,000 and i intend to hire management companies to manage the properties. My questions is:

a) is this a good deal. From the cashflow it seems that i can get a positive cashflow even if i get 100 % financing

b) can i get a lender that can lend 100%. the owner mention that i should be able to get financing for individual properties and by doing that, i can get more money.

I have a decent score (around 700) and i work full time and can provide W2.

I need advice if this is a good deal to pursue and if i can do this no money down.

Thanks for your help…

import · January 16, 2003, 1:53am

Re: Is this a good deal - Posted by JEscobar

Posted by JEscobar on January 16, 2003 at 02:53:15:

Antoni:

100% finance does exist for Investment units, 2-4 units – the deal is thus: fully documented loan, with everthing in the file, and this is a Combo loan with 80 % 1st loan, and 20% 2nd loan. The requirements are tight on this to qualify.

2nd option is 95% finance: same thing, 80% 1st and 15% 2nd loan, with either a fully documented loan, or a Stated Income loan. Requirements are less tight on these loans.

Now, the rates for either loan program is rather high and needs to be quoted to you based on your incomex/employment/credit profile and the cash you have for the down payments/closing costs/and resrves for each property.

It may be possible to get all the properties under 100%, or 95, or 90% finance – yet the documentation you provide will make the deal.

The fact that you are a new investor, and (I assume) with no management experience of the property MAY hinder the approval of all the loans for all the properties.

Good luck-- perhaps you can partner with some others for the finance.