Help me on this deal please!!!

I would assume YES as each one is a different parcel right? If they're all part of the same parcel then it would be NO. But sounds like a great deal for you so who cares how many closings as long as you're making CA$HOLA!!

Sounds like you are talking about three properties. Each duplex is one property. I would guess that you would need three seperate escrows. Each property would have it's own taxes, insurance, title insurance and deed filing. Call a Title Company, and ask them.

Good Luck, Al

It sounds like she said each duplex has its own title making each unit a seperate property... so in fact there would be 5 units total... correct??

This is my understanding of what a duplex is. A duplex is a single property with two living spaces. It is under one title. If the living spaces were seperatly titled, they would be condos. If they were townhomes (with a common wall), then they come with their own property (land) and would be titled seperatly. In a condo the land is not part of the title. Even though you own the condo, you would pay condo fees to the property owner. If they are condos, you would want to be sure you were buying the property they sit on also. This is my understanding, and I may be wrong, but it needs to be checked out.

Al

Like Al said, "Each property would have it's own taxes, insurance, title insurance and deed filing."

I own a fourplex, if I sold it, it would require it own purchase agreement its own assignment and so forth. Highly unlikely that they would have seperate titles for each unit (two titles for one duplex is not normal).

You could also contact/lookup the assessor and identify how the property has been assessed.

Regards,
Rohn
DeJor Properties, LLC

Actually there are 2 titles for each duplex. Each unit is 2 beds 1 bath and is titled separately. In essence if I purchase the five rental units I will have 5 different titles. That's why I am asking about the contracts. Do I need a separate contract for each unit? How will this deal settle?

You will need to settle taxes, insurance, title insurance, transfer fees, and filings seperatly for each title. I would think that you would want a contract on each. If there are any issues with any one of these properties, you would want to be able to close on the others. I don't think a title company would want to group them all together. Contact the Title Company that will be handeling the transaction, and see how they want or need to handle it.

Al

Ok. I have looked at the properties and researched them Here is the scoop...

5 properties for sale $365,000.00
retail Value of 5 properties $471,000.00.

Properties do not have good rental profit. After taxes, insurance, water, sewer and mortgage profit is $456.00 month.

I am not sure if this is a good deal for an assignment. I do not know if investors look at monthly profit or long term RV when purchasing rental properties.

I am going to offer $330,000.00 for the properties then assign them for $20,000.00 for a total investment deal of $ 350,000.00. There is still $ 121,000.00 instant equity in the properties.

Any input is appreciated.

Not quite following you when you say "Mortgage profit of $456.00 a month". What are you trying to say? Are you trying to say that after ALL expences theirs a POSITIVE CASH FLOW of $456.00 per month? Cause if thats the case, then the properties DO have a good "rental profit", please let us know, SULLY

hello Sully, Yes "positive cash flow" that's it. I thought that investors were looking to get a certain amount of "positive cash flow" in order to consider a good deal. Is there a certain % they look to get "positive cash flow" each month from a property. Or is holding the property with a positive equity enough of an incentive?

I hope I am making sense. I am trying to learn the RI terms I can only describe it the way I know how. Thanks Sully as usual you have come to my rescue.

Hey Carol,
If I could find a deal like that here in central/coastal NJ - I'd be all over it!
Just do your homework and check into the rental history and make sure the positive cash flow is a current figure. But for all the possible income properies I've looked at a nearly $500 mo cash flow sounds awsome!
Also, I would say find out status of any current leases, etc., and take a good look at the way the property has been maintained when you get in.
Good luck and keep us posted!

the poperties are all currently rented except 2.The 2 that are vacant have just been rehabbed.
2 of the tenants are section 8. This is primarily a section 8 area. Primarily low income housing.

Tenants have a year lease section 8 leases have just been renewed.

The properties have been kept up with as far as repairs. They are completely rehabbed after each tenant leaves. New carpets, paint, flooring etc...

I don't think an investor would buy this deal for $350k if he was only interested in cash flow. I calculated the cap rate at 1.6. There are five properties to maintain and keep rented. With only $456 positive cash flow total that works out to less then $90 per unit. Do you know what the vacancy rate is in that area? An investor may buy for the equity, knowing that they can make mortgage payment with rent until they sell. Present this deal to your investors and get their feedback.

Al

let's change the scenario a little. The owner of the properties currently has no mortgage on the properties. His positive cash flow is $2,500.00 a month. The cash flow that I presented was based on no money down. Let's say the investor put's $100,000.00 down and I can work my magic for owner financing for the remaining $250,000.00. Will this deal be more appealing?

I did some quick calculations, but did not have all the necessary info. I calculated loan payments on a $350K loan at 7% with taxes of $4000 and insurnce at $2500. The payments on this loan would be over $2700. The buyer would want at least 7% return on his investment, and the seller would probably want a 7% or greated return if he were going to finance. I don't know what the taxes or insurance would be, but if my numbers are close, there would not be enough cash flow to cover the expense.

Al

with section 8 tenants you have no options but to accept the rent the state sends you. The good part is you know you will get your rent every month, but the bad part is you really cant screen your tenants or adjust rents according to your costs, etc. You really cant figure cash flow without hard numbers for all your expenses vs. income.

Hi Carol,
You can use ONE purchase agreement, but the title company will have to title work on each property and charge accordingly. Since you will have only one contract your total closing costs should not be like five closings.

sounds to me the duplexes are set up like twon houses ,or condos ,

Yeah, you know i keep frogeting that the $465.00 CASH FLOW would be desributed throughout 5 "units" but still, Carol you STILL have a DEAL here, reguardless of a CASH FLOW of $90 per month, "IF" and you really need to make these numbers more accurate but, if they DO CASH FLOW for $90 a month, well you can sell that as a "BONUS", it's obvious that your going to be selling this one based off of EQUITY not CASH FLOW, i would stick to the original idea of WHOLESALING this baby, any investor would would love to walk into a $121,000 Equity plus a "BONUS" of $465.00 monthly CASH FLOW, I would offer $310,000-$315,000 and if the seller counters you can always move-up from there, just think, if you can get it for the numbers that i stated, you'll be making even more, plus you can offer an even BIGGER Equity position in the deal for your "END BUYER", SULLY

The total monthly rental income for the properties is $5,100.00.
total taxes is 1795.00 mo.
total sewer is 210.00 mo.
total water is 300.00 mo.

Your right Sully I will offer it as $121,000.00 instant equity with a bonus of a positive cash flow of $465.00 a month. I will offer lower. I was told by another wholesaler in my area "If your not embarrassed by your offer you offered too high"