Wayne,
On the surface this doesn’t sound like a bargain at all. I assume you meant the monthly figure of 38k is a yearly figure. If, and this is purely a guess, you have 2nd mortage debt service of say 8k a year and taxes of 12k that leaves you 7k for profit, insurance repairs, etc. You haven’t provided near enough information though to analyze it fully. What about repair costs for the last few years? Taxes? Insurance? Vacancy rate? Condition of building? This is needed info for an accurate view. DanT
Posted by Wayne Willis on June 21, 2001 at 21:48:30:
Hi. I’ve located two apartment buildings(total 35 units)up for a combined sale in Irvington, NJ valued at $865,000 total. There is a total mortgage of $725,000 and net income of $65,000 per year. The mortgage payments total $38,000 monthly. The seller wants a buyer to assume the mortgages and give him $80,000 (but will take $50,000 cash and carry back $30,000). I have no money and bad credit. What are my options if any.
Wayne, Well, I give you credit for thinking “big”. With bad credit, the mortgage company will not allow you to assume, and as you said, you have no money. This might be a blessing. You have to ask yourself, why is the owner even talking to you. Usually the owner of a quality property doesn’t give out figures except to pre-qualified buyers. He (or she) must ready want to unload. The fact that the owner told you he wants $80k, but would take $50k and your note, should be a “red flag”. Your options? First, suggest you start to repair your credit. Here is a number (888-3466371) that was posted eleswhere here, that is suppose to give you free information on credit repair. Call it. Then, do a lot of reading on real estate investing. Look around for anyone you know that has a good job, some extra cash and are paying a lot of taxes. Talk to them about the benifits of depreciation. Offer to give them 99% of the depreiation of any property, and the return “OF” their original investment. Once they receive return “OF” the amount of their orginal investment, plus their depreciation, your agreement would call for them to become 1% owners and you become the 99% owner. Their is a lot more I could say about this “easy in and hard out” approach to investors, but better you do a little study. Just remember the key words are “return OF investment” , not return “ON” investment. Also, unless you are very strong in apartment management,suggest you start with doubles or single family. It is a lot safer way to get started. Ray