Need advice on first potential deal - Posted by Focus

Real Estate Investing
1

Posted by Focus on May 09, 2001 at 18:59:19:

Thanks for your advice.

Focus.

2

Need advice on first potential deal - Posted by Focus

Posted by Focus on May 09, 2001 at 12:48:49:

Hi, everyone. I’m a newbie in REI and I’m new to this site, too. But I have been reading almost everything on this site. I have gone through CS a couple of times and I have CS Success Series.

I have come across some potential deal and I would like you guys to confirm or kill my excitement.

Investor is selling 17 units in a larger rental building for $680,000 (10 of them are one bedrooms). They are owned free and clear. Net operating income: $44,000, all units currently rented. Location is great, too. Seller is willing to carry a 10% second (no interest rate discussed yet) and help me get a first for about 80% LTV if my credit is good (which it is). He also says he could lease-option to me for renewable 3 months terms, with $10,000 initial L.O consideration fee. He’s also not excluding 5% down if nothing else, although he is very reluctant to do that. I don’t know why he is selling but he sounded motivated enough for me. The units were already for sale in January this year.

Questions:

  1. Supposing the price is right, title is clear and his numbers are correct, how would you structure your offer?

  2. What do I need to check, other than his numbers, before I get in the deal?

  3. Is the fact that the units are part of a larger building a problem?

I’m asking obvious questions because I’m all new to this. This would be my first deal.

Any input would be greatly appreciated.

Focus

P.S: I live in Maryland if that helps anything.

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Re: Need advice on first potential deal - Posted by john

Posted by john on May 09, 2001 at 15:21:52:

sounds a little to ambitious to me for starting out trying to learn the system…personally Id start with a duplex or quad to learn the system…then fry bigger fish!