Something I have been working on the past 4-5 days, and something that I feel would be a great investment for the capital rich real estate investor. Note, you will need between $40k-$50k down for this, but the payoff will be generous over the next 3-5 years. At time of this post, you will need 10% down for non-owner occupied for well qualified investors. Note again, this is for VERY QUALIFIED INVESTORS!
Details on property one:
Watkins - Stratton Model by M/I Homes. Available for lease back to M/I homes.
Watkins / Stratton Model is available for $479,990 - lease term is $4,389 per month for (1) 6 month lease, with (15) 3 month extensions. 2% earnest money required at time of contract. $1,550 in buyer/seller closing cost plus 1% with the use of M/I Financial only. Located in Lawrence Community opened in July 2007 75 total home sites estimate of 3 years until close out at a pace of 2 homes per month
Photos of home are available online here
Now Look at the numbers:
Purchase price: $479,990
Down Payment: $47,999
Monthly payments at 7% for 30 year note: $2,874. Taxes: $700/month. Insurance: $100/month
Cash flow of $600/month plus depreciation expense of $5,900/year(based on 27.5 year amortization in 33% tax bracket). = $600+ $489/month in tax savings = 1,089/month in cash flow before interest savings.
Property goes up in value at a conservative 4%/year. 4% after first year is $19,200 increase in value. Principal pay down is $300/month. Add on the $1,089/month listed above.
CASH ON CASH RETURN comes out to be $35,868/$47,999 =
75% cash on cash return. WOW
I'm not even including your savings from interest deductions.
UPDATE: THIS HOME WAS SOLD BEFORE I WAS ABLE TO GET THIS LISTED AND SENT OUT TO MY OTHER INVESTORS.
An investor or ours found the photos I had placed under "specials", called me up, and locked in this deal already.
Details on property two(STILL AVAILABLE)
Carmel - Broderick Model MI Homes
Broderick model is available for $376,000 - lease term is $3,011 per month for (1) 6 month lease, with (15) 3 month extensions. 2% earnest money required at time of contract. $1,550 in buyer/seller closing cost plus 1% with the use of M/I Financial only. Model is located at Heather Knoll - located just West of Towne Rd on 141st st. Community entrance is on the north side of 141st St. Community is about 3 years old, will have a total of 151 homes when complete. Completion is estimated to be in 3 years...or more. We have 42 moved in homeowners. Of the 151 total, we have 50 home sites to be developed late fall 2008 / early spring 2009.
Photos of home are available here:
Now Look at the numbers:
Purchase price: $376,000
Down Payment: $37,600
Monthly payments at 7% for 30 year note: $2,251. Taxes: $600/month. Insurance: $80/month
Cash flow of $80/month plus depreciation expense of $4,512/year(based on 27.5 year amortization in 33% tax bracket). = $80+ $376/month in tax savings = 456/month in cash flow before interest savings.
Property goes up in value at a conservative 4%/year. 4% after first year is $15,040 increase in value. Principal pay down is $260/month. Add on the $456/month listed above.
CASH ON CASH RETURN comes out to be $23,632/$37,600 =
63% cash on cash return. WOW
I'm not even including your savings from interest deductions.
ALSO, we throw in one year of management for FREE when you purchase a new home through us. When we mean one year FREE here, we mean one year FREE AFTER the lease back expires, not during the lease back, as there is really no management to be done while this is under a lease back scenario.
Contact Craig at 317-490-5074 or Derek at 317-796-9825 for additional information. Also via email at info@MyIndianapolisHome.com or at our office at 317-839-8786
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