So I found this deal I haven’t delved deep into it yet but here’s the description: This four story 9 family well maintained walk-up building has nOI of $99K and located on a quiet dead-end street. The list price offers 9.9% CAP! Improvements includes newer gas boiler, electric and plumbing. All units are now occupied. Up and coming area ,Near the court house.Taxes below $3000.
Is this a good find, and is there anyway I could structure this so that I could put no money down? I would assume 2-3% of profits.
There is not enough information to determine if this is a good deal, however, with what you have shared, doesn’t sound too interesting to me. Having said that, when you do have enough information to make a decision, this is how I might handle an offer to accomplish a no money down deal.
I would list all the negatives and review them with the seller. Point out that he is in a ‘bad situation’ owning this property and that it would not interest most investors for these reasons. Then, I would say something like this, if you want me to assume your bad position in this property, you need to write me a check! Then start to negotiate that amount.
This might sound too unconventional for most but this has worked for me dozens of times. I’ll give you one of many examples. There was a beautiful home for sale and listed as a L/P with $10k down in a country club neighborhood. I looked at the property, talked with neighbors, and found out that the property had been for sale and vacant for over a year. Also, there were new construction homes one block away in same subdivision going up for less money than he this seller owed on his home. I called and reviewed all the negatives and he agreed that he was in a bad position.
I told him that I was in this business and would have to package this home and perhaps a business together to get rid of this home, but I could do this. We negotiated and he ended up writing me a check for $10k to take him out of his bad situation. I never made a payment on this home as I did package the home and a business together and sold it with ower financing to a new buyer.
Getting back to your property, no money down is much easier to negotiate after the seller gets a shocking response from you that he needs to write you a check for taking him out of his bad situation. You see, my seller had no end insight until I made this offer to him and he decide to take my offer…to write me a check and move on. This is one of the strategies I teach my students to make money up front on deals. Make unreasonable requests and see what happens…you will like it!