Sunday, March 19, 2006
Details on previous offer!
As promised from one of the bloggers, here's the details on my fourplex offer. This was actually printed out and attached to my offer to the seller. Why did I do this? For several reasons.
1) I have to prove to the seller that a property is "valued" at what the property can take in and I will only buy a property if the numbers work.
2) On this deal, I am asking the seller to carry back his equity in the amount of 168k. I figure that the seller will feel more comfortable with the carry back when he relaizes that I don't have huge amounts of negative cash flow.
For creative offers like this , keep in mind that you can get lower mortgages by reducing the SALES PRICE or TERMS OF THE LOAN. In this case, I am offering only 3% to the seller for the carry back. This allowed me to increase my offer price so I didn't have to be low balling him.
Good investing!
.
1) I have to prove to the seller that a property is "valued" at what the property can take in and I will only buy a property if the numbers work.
2) On this deal, I am asking the seller to carry back his equity in the amount of 168k. I figure that the seller will feel more comfortable with the carry back when he relaizes that I don't have huge amounts of negative cash flow.
For creative offers like this , keep in mind that you can get lower mortgages by reducing the SALES PRICE or TERMS OF THE LOAN. In this case, I am offering only 3% to the seller for the carry back. This allowed me to increase my offer price so I didn't have to be low balling him.
Good investing!
.
|| Bginvestor, 11:59 AM
5 Comments:
Nope...
Cap rates in great neighborhoods selling around 5-6. 7 is the average..
Welcome to my hell!
Cap rates in great neighborhoods selling around 5-6. 7 is the average..
Welcome to my hell!
What was the response to this offer? And are your figures in the ballpark? There's an awful lot of zeroes for expenses there...
Shaun,
No response! I called the guy several times.. This usually means he was not interested in my offer.
No response! I called the guy several times.. This usually means he was not interested in my offer.
I believe that you should factor in the tax ramification of owning a rental. I believe that the cost of the structure can be depreciated over a 30 year period. Assuming 300K on the structure this would calculate out to 10K off your income thus your bottom line might look a bit more rosie:)
If I recall correctly the 1987 tax act changed the depreciation schedule to 30 years from 20. Thus it had a major factor in the 1987 housing crash. I was fortunate enough to buy my first house in 1988. It turned out to be a great time to buy.
Alex
If I recall correctly the 1987 tax act changed the depreciation schedule to 30 years from 20. Thus it had a major factor in the 1987 housing crash. I was fortunate enough to buy my first house in 1988. It turned out to be a great time to buy.
Alex
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- Location: Southern Arizona, Arizona, United States
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that seems awful low to me... am i missing something?