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- Jul 26, 2007
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Okay- I am straddling the divide between residential/commercial real estate, as well as employee/business owner. Something's gotta give! My intention is to get into mult-unit vacation rentals- and it would be great to be in a position to increase the value and refi out (that was my understanding of a post by AroundtheWorld. Increase NOI=increase cap rate=increase income. Right?). Based on this strategy (increasing NOI and cap) I could buy these 5 cabins, fix up, increase cap and refi out. Am I on track here? The owner is asking $550 for the whole complex (9 units and the owner's quarters (jail cell) ). He is willing to split into into 2- $275k for each. The income he has listed is around (don't have numbers in front of me) $45k. Total expense with my new debt service would eat that up. However, I think under my mgmt I could increase income as all 9 cabins are vacation rentals...and I would rent out 1-2 as long term rentals. The owner's quarters could be used for something else as well. Laundry room? Game room? Snack bar? All of the above?
So...would it be wise for me to buy these (or buy half) and increase income and then refi money out? Am I even close to being on track here? ...How do you guys make money when you buy properties with low occupancy?
So...would it be wise for me to buy these (or buy half) and increase income and then refi money out? Am I even close to being on track here? ...How do you guys make money when you buy properties with low occupancy?
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