I have located an apartment complex in good condition, 16 units in 4 buildings, 3-2bd/1b and 1-1bd/1ba in each building. Rents are 800 and 500. 11 are currently rented. total sf is 13,000+. The owner lives over 2 hours away and is managing it himself, so just wants to get out. He’s asking 799,000. I want to offer him a master lease to take it over, with an option to buy in a few years. My question is: How do I sell this to the realtor, who will have to wait a few years to receive his commission? I do not have money to put down on this.
The thing is, is the Realtor won’t get paid till you physically purchase the property with cash or financing, however long that’ll take you. And since it’s an option, it’s not even guaranteed you’ll buy it. In other words, unless that realtor really trusts you, or you pay half his commission (or something like that) up front, He’ll just shuffle you to the back of the line.
800K for a low occupied 16 unit? sounds really high to me.
4 bldgs @ $200,000 each doesn’t sound too unreasonable if they’re in good shape. The vacancy is probably low b/c of poor mngt. Why don’t you run a projected income stmt and show us the numbers so we can help further? Don’t assume that just b/c he’s ‘motivated’ it’s a good deal.
You could offer 100% seller financing with a one or two year balloon and give the agent a higher commission. It’s probably a longshot though…
If you don’t have any money to put down, what about repairs? Are those units vacant because they need work? Is this your first potential deal? If you have no money and no experience, maybe you should get your feet wet in the shallow end of the pool first.