I finished med school and couldn’t pass my USMLE. I owe about 300,000 dollars in student loan. the apartment complex I am living in is for sale for about 2 million dollars. the payment would be about 13000 dollars per month. the income is only about 15 K per month IF all the tenants pay the rent. Shall I risk and buy this complex in hope of selling it next year for about 300 K more so I can pay off my student loans?
Sell and Rent Back
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i would find out why are they sellin the aprtment cuz obviously of some financial problems and i dont want to put that on my back! research about that then make ur problem, who knows, maybe ull become a real estate agent somday
I would think you would want to factor in a 5% vacancy allowance as well as a 5% managment and maintenance allowance. If you think you can pull off the lending piece and cover the closing costs somehow (conventional or creative) then go for it. You don’t have to use a 30 year loan, their are companies out their with different products that would increase your monthly cash flow. I’m not sure how you would expect to sell it for that much more when the thing barely cash flows and you obviously won’t have any inherent equity after a year but thats not to say that their isn’t a way. Good Luck
If you can get approved for a mortgage of that size with that much debt already, I would really be wondering what connections you have in the mob. When you say income, you mean net income correct? Not income revenue? It’s a lot of ifs. I would need to do a lot of due diligence on the property before I bought it. Maintanence costs, expected vacancy rate, administrative and management fees, the real estate outlook for the neighborhood, all of that needs to come into consideration if you just want to turn it over in a year. Why is your landlord selling it if it is profitable?
Don’t risk it take the test again!!!!
owing so much in student loans, you may not even be able to qualify for a $2M purchase price.
Talk to a lender first.
Then talk to a few commercial Realtors in the area. The housing market has softened a bit, I’m not so sure how the commercial market is doing in your area.
You always need to figure vacancies into your net.
Check your area vacancy rate. Someone suggested 5%, but I know of areas as high as 30%, and managment as high as 10-15%. $2K a month isn’t leaving yourself much breathing room, how much is taxes a month on a $2,000,000 property? I’ll bet they’re up there.
I wouldn’t pay much more than $750,200 for a property bringing in that kind of money. You have to think about your property margins. I’d be willing to bet you’ll be paying money out of your own pocket to keep this place running before you could sell it for $2.5mil.