I believe the FHA 203k program can go up to 4 units. The program includes escrows for repairs. Might be something to look into. Also, lots of times on multi-families, you can use rents due as part of the DP if the seller will accept it.
Also, what are you doing for valuation here? Have you seen any pro-forma statements, or signed returns? You should be looking at NOI to determine cap rate on a property like this; after all, it’s only worth what it will cash-flow. In other words, unless the rents have gone up since they bought it, then the value hasn’t either, even if SFH properties in the area are appreciating like a bat out of heck.
Im looking at a 4 family with a duplex on the same 2 acre lot in a great area that is underpriced, but needs some work. There has got to be a deal in here somewhere but I just can’t see it. Do you guys have any ideas?
Details:
Asking price is $600,000. They bought it for 450,000 2 years ago and since have kind of taken it into the tank. So I am thinking of offering around 525 to 550,000. I imagine fixed up this place would go for at least $750,000.
The main problem is that I don’t have any cash accessable for any kind of a down payment. I will be living in one unit of the duplex here…are there any good financing options? Is a land contract a good option here? Is there any place that will do a rehab loan, meaning giving some extra cash to fix the place up based on the rehabed prospective appraisal value?
I currently owner occupy a duplex but I pulled most of the equity out of it and am a partner in a 16 family and it looks like this $$ is tied up for the time being, unfortunately. By the way my credit is about 725 if this gives any ideas
I wouldn’t bother to ask you the how to’s but this is exactly the property we have been looking for but it has come along at a time when money is short.
Re: Man o Man I need some help here - new guy - Posted by BobJ (Md)
Posted by BobJ (Md) on August 20, 2003 at 15:12:23:
See if the owner will carry a second. You’ll have to go to a commercial lender, and they’ll set the value based on current rents. You’ll need copies of leases to show the lender. You can get commercial lenders to go 75-80% of the value based on current rents. If the owner will carry a second for a while, you’re in for little or nothing out of pocket. By the way, many commercial lenders will still want you to have 10% of your own money in the deal. As the owner-carried portion becomes larger, the commercial lender is less concerned with this. If you could get the owner to carry 40% or more, you probably wouldn’t have to put up much of your own money.