Hey guys, I’m a few days away from closing on an 18-unit property, via subject-to the existing financing. I’ve done all the due diligance, property is in great shape just needs new management. The plan is to put down 12% at closing, fill up the vacancies and pay the seller via a refinance. 12% buys me 3 months time; should I need more time, I have to put down an additional 5% in month 3 to buy me another 3 months, for a total of 6 months. Since this is subject-to, I plan to get the deed. The property has 4 hard vacancies, 1 tenant being evicted, 1 tenant not paying full rent, and 1 tenant moving out. I figure within 6 months, I can at least get 4 units filled, leaving me with 3 units vacant worst case, so I shouldn’t have any problems getting a loan. I spoke to some lenders already, including the one that rejected the deal. That is actually why I’m buying it subject-to. I initially tried the traditional 80/20, but the lender rejected the deal after seeing the rent roll. So I offered to still close on the property to the Seller, but to change the terms. Fortunatly the seller is motivated and didn’t require that I up the price.
So if anyone can think of any last minute things to verify in a subject-to deal like this for an out of state investor, I’d greatly appreciate it! I plan to post my progress in repositioning this property in this forum, either positive or negative! I already have the property management company picked out that has already started advertising the vacant units and has 2 prospective renters eager to view the units. That’s already 50% of my objective.