Seller has a 6 plex, a 6unit condo, a single family home and a 3plex for sale. All are occupied and the condo’s can be sold individually. He will carry with 20% down, for as long as two years @6%.
He is an out of state owner with health issues, properties can use some updating condo’s especially. Been trying to sell for almost a year. Open to nogotiation.
Buyer, looking for creative ways to buy one, part or all the properties. Properties could support themselves with rents. Looking to buy/ hold/ update then sell.
All thought, questions and comments are appreciated
You don’t give us much to work with. Since the seller will agree to carry 20% are you able to get financing or cash for the other 80%?
If you can’t get the money from an institutional lender, then hard money, private lenders (don’t forget your own family), and taking on investment partners are your immediate options.
If the seller will agree to do an 80% first mortgage, and a 20% second, maybe you could arrange to have the first mortgage bought at the settlement table.
What are the numbers? In the real estate business, EVERYTHING depends on the numbers (money). Gross rents? Purchase price? Rehab needed? Show us the numbers!!!
The seller wants 20% down and will carry 80%. I know there is no deal until i gat the numbers, iv requested the financials and hopefully will have them soon. I spoke with him a few months back and figured he wasnt that motivated. But he emaild me yesterday asking if i was still interested and hes lowered his down pmt %. So i feel hes motivated now. His concerne is being in first position. He wants to remain in first position.
OK i received the financials for these places. There as follows,
6 Unit condos asking $850,000 wants 20% down will carry @ 6% Positive income is $3350 after cost.
6Plex asking $550,000 wants 20% down will carry 80% @6% after caost income is $1780
3plex asking $400,000 wants 20% down will carry 80% @6% after cost income is $1500
SFH aking $200,000 wants 20% down will carry 80% @ 6% after cost income is $560
I think the asking price is to much for the income. Are these deals appraised off the income or the real estate value? Not sure that this is a deal, Can anyone help me ask the right questions?
The condos, 3-plex, and the sfh appraisals will all use comparable sales to establish value. A commerical appraisal for the 6-plex will most likely use Net Operating Income at a 10% cap rate to establish value.
Once you research and determine “ALL” of the numbers I wouldn’t touch anything where I needed to put 20% down UNLESS I was buying at a greatly reduced price point. Don’t put your money or credit at risk unless your making bucket loads of money…
And have you asked the real questions of the seller?
You said he has health issues… I would ask him what is going to happen if you don’t buy… Is he wanting to sell or is he wanting someone to be his property manager with an equity position. After all his tenants haven’t given him 20% down and he is collecting what is in essence a mortgage payment from them. Is he wanting to adjust his holdings before he dies - does he have anyone to gift the properties to… Where is the “True” motivation. You have to build the value of you and devalue everything else…
And remember Buyers set value not sellers… You need to understand that sellers must “BEG” us to buy their property…