Hello, this is my first post but I'll try and keep it as concise as possible.
New to real estate investments. My partner and I have been trying to establish a formula/model that will allow us to break free of the 9-5 and use our time more wisely. We intend on doing real estate investing "full-time" and would like a little feedback on getting started.
Our first formula consists of purchasing a 8-12 unit apartment building. The building will rent to professionals who pay on average of 1000 per unit. The buildings we want will be already renovated and 100% occupied. Our goal is to use a very conservative analysis of cash flow (the JScott spreadsheet as been incredibly valuable) with vacancy rate, modest repairs, proper managment etc. Our NOI will cover the mortgage along with the "private lender" financing that got us the down payment. This will leave us a small amount of actual cash flow left in the building. The most important part is the "cash out" terms that will be part of the deal. We are looking to get 50,000 to 75,000 from the seller to finance us until the next purchase. These buildings are million dollar plus buildings and our goal is to obtain 5-10 within 1 year.
Private lender note.... we have a significant source of private financing who will probably give us gentle rates why we are getting started.
It does not seem that equity is a viable option for getting cash out of these apartments because 1. Unless the rents go up a significant amount the Appraisal is relative to the purchase price (the place is worth what you bought it for.) 2. An appraisal to start the refi is over $4000 and the costs of refinancing a million dollar property make taking any money out counter productive.
I will start with that.
THANKS
New to real estate investments. My partner and I have been trying to establish a formula/model that will allow us to break free of the 9-5 and use our time more wisely. We intend on doing real estate investing "full-time" and would like a little feedback on getting started.
Our first formula consists of purchasing a 8-12 unit apartment building. The building will rent to professionals who pay on average of 1000 per unit. The buildings we want will be already renovated and 100% occupied. Our goal is to use a very conservative analysis of cash flow (the JScott spreadsheet as been incredibly valuable) with vacancy rate, modest repairs, proper managment etc. Our NOI will cover the mortgage along with the "private lender" financing that got us the down payment. This will leave us a small amount of actual cash flow left in the building. The most important part is the "cash out" terms that will be part of the deal. We are looking to get 50,000 to 75,000 from the seller to finance us until the next purchase. These buildings are million dollar plus buildings and our goal is to obtain 5-10 within 1 year.
Private lender note.... we have a significant source of private financing who will probably give us gentle rates why we are getting started.
It does not seem that equity is a viable option for getting cash out of these apartments because 1. Unless the rents go up a significant amount the Appraisal is relative to the purchase price (the place is worth what you bought it for.) 2. An appraisal to start the refi is over $4000 and the costs of refinancing a million dollar property make taking any money out counter productive.
I will start with that.
THANKS
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