wstewart003
04-07-2005, 02:26 AM
I'm new to investing in the Richmond VA area. I have recently signed a purchase agreement on a quad but now after doing even more research, I'm wondering if I just made my first mistake. Any responses will be appreciated as if this is a bad deal, I think there are outs. I worked through a realtor in Richmond, but not sure if he nor the owner have been truly open. Maybe I have the jitters since this is my first deal, but looking at the posts and what many members of are doing, it might be more than just Jitters.
Asking price: $279,900
Price agreed too: $250,00 (as-is)
Category: multi-family - quad
Gross Income $31,200 (each unit is rented for $650). Not sure it is difficult to find renters but one of the individuals currently in one unit will have to go as it is my understanding she never pays on-time. When I also went to visit the property, the only thing she did was complain the entire time about the existing owner.
The tax assessment for 2005 is $188,800.
After performing all calculations, including cash flow analysis I come up with an average monthly income of ~$300.
I have walked through the property (without tenant notice) and have found that even though the gentleman that owns it has indicated since his purchase in 2004 he has put in new carpeting, kitchen appliances and painted....I really find that hard to believe. The owner doesn't seem to have records for any of this stuff and he conveniently cannot get hold of the previous owner to get information concerning the new roofing, siding, etc. that is on the property. All of which I would assume should have been turned over to him when he purchased the property.
Structurally the property looks good but I do want a home inspection prior to purchase. My questions are:
1. If the property is worth more than 250,00 (purchase price) my goal is to use the equity for down payment and only have to pay closing if possible. Is there anyway for me to determine an approximate assessed value so I know what my options are before dealing with the lender?
2. When performing my market analysis there were homes sold in December 2004 timeframe (multis) with the same square footage and age, within .8 to 2 miles for anywhere between $279,500 and $315,000. Is it realistic to use those comparable? The comparisons were close but not exactly in the same neighborhood. Although close, it is a world of difference in the neighborhoods.
3. Has anyone ever dealt with a lender that says if I get the contract written for the assessed value and then have the seller sign a form indicating they will only accept the agreed upon price at closing? Example. If I think this property can assess at say $300,000, then I have the contract re-written for that value. At the same time have the purchaser agree to accept only the $250,00) as this will immediately establish some equity for me. This equity can then be used as part of the down-payment since they will finance at 80%. Does this make sense? The lender will go 80% so I need to come up with 20% down. His advice sounds good but not sure how I can get a true baseline of what this thing will appraise for before a real appraiser takes a look.
.I need to make some decisions soon so financing can continue.
Thanks in advance for advice sent my way.
Asking price: $279,900
Price agreed too: $250,00 (as-is)
Category: multi-family - quad
Gross Income $31,200 (each unit is rented for $650). Not sure it is difficult to find renters but one of the individuals currently in one unit will have to go as it is my understanding she never pays on-time. When I also went to visit the property, the only thing she did was complain the entire time about the existing owner.
The tax assessment for 2005 is $188,800.
After performing all calculations, including cash flow analysis I come up with an average monthly income of ~$300.
I have walked through the property (without tenant notice) and have found that even though the gentleman that owns it has indicated since his purchase in 2004 he has put in new carpeting, kitchen appliances and painted....I really find that hard to believe. The owner doesn't seem to have records for any of this stuff and he conveniently cannot get hold of the previous owner to get information concerning the new roofing, siding, etc. that is on the property. All of which I would assume should have been turned over to him when he purchased the property.
Structurally the property looks good but I do want a home inspection prior to purchase. My questions are:
1. If the property is worth more than 250,00 (purchase price) my goal is to use the equity for down payment and only have to pay closing if possible. Is there anyway for me to determine an approximate assessed value so I know what my options are before dealing with the lender?
2. When performing my market analysis there were homes sold in December 2004 timeframe (multis) with the same square footage and age, within .8 to 2 miles for anywhere between $279,500 and $315,000. Is it realistic to use those comparable? The comparisons were close but not exactly in the same neighborhood. Although close, it is a world of difference in the neighborhoods.
3. Has anyone ever dealt with a lender that says if I get the contract written for the assessed value and then have the seller sign a form indicating they will only accept the agreed upon price at closing? Example. If I think this property can assess at say $300,000, then I have the contract re-written for that value. At the same time have the purchaser agree to accept only the $250,00) as this will immediately establish some equity for me. This equity can then be used as part of the down-payment since they will finance at 80%. Does this make sense? The lender will go 80% so I need to come up with 20% down. His advice sounds good but not sure how I can get a true baseline of what this thing will appraise for before a real appraiser takes a look.
.I need to make some decisions soon so financing can continue.
Thanks in advance for advice sent my way.