Need Capital for Rental Property Portfolio
| Listing Information | |||
|---|---|---|---|
| Amount: | $25,000.00 | Status: | Expired |
| Grade: | A | DTI: | 55% |
| Lender Rate: | 29% | Borrower: | STL_Dealmaker |
| Finished | State: | MO | |
| Funded: | 58% | Group: | (No Group) |
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Purpose of loan: This is a relisting of my initial loan request. I've incorporated answered questions where possible. This loan will be used as working capital for my business. I currently own 8 duplexes and 20 single family rental homes in Missouri. A spate of bad tenants has resulted in several vacancies, damaged properties, and a negative cash flow situation (approximately $3,000/month). All of the houses were occupied and the tenants appeared to be paying their rent when we bought them. In the course of our first year of management, there was a sharp turnover of 14 of the original 19 tenants including several evictions for non-payment. We also had some A/C units stolen, eating our $1K insurance deductable, Make-readies for the empties turned out to cost upwards of $1K. There are 6 houses empty now. This loan would provide much-needed time to make the necessary repairs and get the empty units filled as quickly as possible. My financial situation: My wife and I have owned and operated rental properties for 3 years now. We made our first purchase of the 8 duplexes and 1 single-family house in southern Missouri at the same time that we purchased our first home in the St. Louis area. Those properties were not well-maintained and had had many problems with tenants as well. Three years later, it's humming along nicely and producing a fairly stable $1,500/month net. I have no doubt that in time we can do the same for the 19 single-family houses we recently acquired, but with the added benefit of significant equity growth. While I am likely to hold the southern Missouri properties indefinitely, the plan for the 19 houses is to hold for the next 3 to 5 years, and then sell for a significant profit. All of the current loans are 30 year fixed mortgages at an average rate of 7.5% The value of the 19 houses at time of purchase was $1.41m, and the inital loan balance was under $1,28m. The equity came from a forgivable loan from the seller. It was quite the amazing deal that I was glad to have land in my lap. I just need to get over the hump so these houses are as self-sufficient as my other properties. The Mid-West real estate market has been remarkably stable during the recent nation-wide downturn which was driven by the wild speculation and inflated pricing on the East and West coasts. And once the overall market stabilizes, we are likely to see a large increase in equity growth for suburban homes like the ones I own. I have already invested upwards of $30,000 into this project and I have every confidence that I will draw a large return. With an original appraised value of nearly $1.5 million, even just a small 3% annual appreciation (average inflation) combined with the gradual pay-down of the mortgages, a positive monthly cash-flow and the equity already in the properties when I bought them, I'll be looking at a profit of well over $500K in 5 years. Payment of this loan will be a top priority as I work towards profitability. Funds will come from our reserves until we are cash flow positive, at which point it will be fully funded (along with all other regular obligations) by the rental income. I plan on paying it off completely with the earnings from future projects by the second year of the loan. Gross Rental Income (Current): $14,300/month Gross Rental Income (Projected 2 - 3 months): $17,900/mo Note: My DTI does not include income from rents or my wife's salary ($22K/yr. gross) My Southeastern MO properties include the 8 duplexes and 1 single family home. The remaining 19 single family houses are in North STL County. Southeastern MO Rental Income: $4,265 PITI: $1,448 Maintenance & Management: $1,000 (varies) North STL County Rental Income: $10,035 PITI: $12,300 Maintenan |
| Borrower's Other Listings | |||||
|---|---|---|---|---|---|
| 343451 | Need Capital for Rental Property Portfolio | A | $25,000 @ 29% | Jun 03, 2008 | Expired |
| 354053 | Need Capital for Rental Property Portfolio | A | $20,000 @ 25% | Jun 20, 2008 | Loan created |
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