Best way to structure this deal?


A seller a few hours away wants me take over his 4-unit (all 1 BR/1 Ba) residential property straight up. Has good tenants (month to month) but the rents ($1,200) barely cover his expenses and he’s tired. Looks like there’s some upside potential to the rents but probably installing replacement windows and off-loading the utility costs on tenants will be more effective to increase cash flow. He’s 7 years into a $35K 15-year mortgage, payments of which I’d be taking on unless suggested otherwise. Comps are probably in the $70-80K range.

Exit strategy probably either quick wholesale now or, after 6-7 months to get the numbers where they should be, a re-fi or sale in 6-7 months to take the seller out altogether.

What do you think? Thanks in advance.


Anyone have an opinion - good, bad, otherwise?

Something that sticks out to me is “property is a few hours away”. If you are saying the property is a few hours from you, I don’t think I’d take it on, especially if it’s your first time being a landlord. You don’t want to just take over his problems for very little profit.

You can always just hire a management company. I would do it if he gives me a bunch of equity and is willing to wait for his money as a second mortgage… no payments and no interest due upon subsequent sale of the property.