Working on figuring out possibly my first deal!

[Carter Knobloch]

Hello all, long time listener (1 year), first time poster! Just to preface my current situation a little bit, I work at an electrical distributor in the area. One of the owners of the contractor that shops with us frequently has a couple rental properties, and he’s been tossing around the idea of getting away from the residential rental space. I’ve been asking him about the property quite often, which is a triplex. One unit is a 3/1 and the other two units are 1/1s. I’ve been using the calculator to play around with what the numbers could look like, and he’s considering working out a land contract deal. I have a feeling that if I can give him really good concessions from my part, he’ll be willing to work out a no-money down deal with me. How often should I pursue working out a deal with him on this property? He’s very much over the fence about it right now, but I’m still pretty excited by the thought of it. Any pointers or advice would be greatly appreciated!! Happy investing!

[Carter Knobloch]

Quote from @Chris Merchant:

Have you asked him what he would to get out of the deal at closing?  It seems he may be in a good financial position so he may not necessarily need the money right away, you may be able to work out some creative financing and he may be willing to finance the deal due to tax implications of capital gains if he were to receive payment in a lump sum.  Or there is always the possibility of a lease option if the numbers work out for both parties.  It seems from your post his desire (problem) is he wants to get out of owning and managing residential real estate, and your desire (solution to his problem) is you are interested in taking on the task of owning and possibly managing a residential rental, so you just have to make the deal work for you both and if it doesn't work or his demand doesn't work with the numbers you've ran already than don't be afraid to walk away.

 Chris, this is exactly what I was thinking. I’m thinking he wants to get out of managing the property, and I can be the answer to that problem of his. He owns this property outright, so that’s where I’m thinking some kind of creative financing deal could work. Not that this matters much, but the way I ran the numbers, I could offer him much above what the market value is for the property. Of course, the value is based from a residential point of view and not a multi-family point of view, so perhaps he finds the property is much more valuable than what Zillow says. I’ll figure this out as I go down the road with this one. Thanks for your input!