Official Carleton H. Sheets^® Website

Hi there, it's me again. I'm baaaaack!
Well, they say you can't learn to swim without getting wet, so here goes.
I have found an older 18 unit rental property in what appears to be a lower income (section 8?) area Houston Texas. The units are currently 100% occupied at $425 per month, except one unit which is occupied by the current owner. Each unit has a separate electric meter, and tenants pay electric bills (which is very important, because electricity can be very expensive in Houston, especially in the summertime).
The math at a glance:
One unit to be reserved for on site property management/Owner (me) Value $425
17 units X $425 = $7,225 monthly income X 12 = $86,000 annual income
Debt Service........-$2 168....30%.............................- $26,016
Taxes and Ins.....-... $867....12%.............................- $10,404
Mgmt. costs.........-...$578....08%..............................- $ 6,936 General maint., rental ads, etc.
Vacancy................-...$722....10%...............................- $ 8,664
OS Mgr. Sal..........-...$722....10%...............................- $ 8,664 This would be paid to me.
Reserves............-..$1,084....15%..............................- $13,008
Balances................$1,084 Monthly...........................$13,008 Annual Positive cash flow.
How I see structuring this deal:
Form a Limited Partnership with My Company, Dynamatrix Internet Business Solutions, LLC as the General Partner.
I would reside at the property, and manage the property, collect the rents, deal with the accountant, deal with the tenants, maintain and upgrade the property as necessary, and be paid a small salary as the on site manager.
The positive cash flow would be paid out monthly to the partners in shares equal to investmet.
Examples:..............with 4 partners, $1,084/5= each partner would receive $216.80 per month
.................................with 9 partners, $1,084/ 10= each partner would receive $108.40 per month, etc.
The reserves would be held in a money market account, Certificates of Deposit, or some other low risk investment, agreed to in advance by the partners.
The partnership would be set up to refinance and liquidate at 24 or 36 months, with the option to roll over for an additional 24 or 36 month to continue to build equity, if all partners agreed to continue to hold the property unanimously. At liquidation the equity and reserve account including accrued interest would be paid out to each partner in parts equal to investment.
ROI:
with 4 partners for 24 months- 216.8 X 24= $5,203.20
PLUS 2 X $13,008 = $26,016 / 5 = $5,203
Total = $10,406
with 9 partners for 24 months- $108.40 X 24= $2,601.60
PLUS 2 X $13,008 = $26,016 / 10= $2601.60
Total = $5,203.2 each... and that's not counting appreciation and equity!

Any Questions? Comments? Advice? Wanna be my partner? PLEASE reply to this post!!!
Thanx for reading it,
Brian

The owner is asking $385,000. He says he won't owner finance, but he seems motivated. I think he's tired and wants to retire to Florida or something. I figure if we offer $350,000, we can obtain funding for 60% from just about anybody with 10% down, so might need as much as $35,000 cash, but we MIGHT be able to negotiate the owner carrying a second for 2 years, which would reduce our up front costs.
I would think the best way to proceed would be to find 6 to 9 partners with $5,000 each available to invest, and make an offer, and negotiate from there.....

Yes, I am serious.
The bottom line is we can all sit around on the sidelines watching, and waiting to see what "the other guy" is gonna do, or we can BE "the other guy" and take advantage of the current market conditons and make some money.
I've got $5,000 cash, a good recession proof job and income, and the will. Need 4 or five people in similar position, who aren't locked down by fear to make this happen.
When the going gets tough, the tough get going... and get rich. Just ask Donald Trump and Robert Kyosaki.
Brian