How should I structure this deal? 10 units for a first time deal.

[Jim Land]

Been doing lots of research for last 6 months. Wanting to get into buy and hold. Have a local guy who does a ton of investing deals I’ve been talking to. Owns a management company, they’ve been doing great things last couple years as far as getting good tenants and cleaning up bad parts of town. He is willing to help me provided he does the management which I’m good with.

The deal

Duplex, 2- 2bed 1 bath units.

Triplex, 3- 2bed 1 bath units.

Fiveplex, 3- 2 bed 1 bath units, 1- 3 bed 1 bath and a 1bed 1bath (prob convert back to 2/1’s)

Current landlord pays all utilities, rents at $600mo each unit

All but one unit is full and all but one have expired leases

After a bit of rehab they should rent for $650-700mo easily, tenants pay utilities.

Asking privately 300k for all of it. The triplex is rough. Rest are a coat of paint and flooring. 2 bathrooms need redone. Estimated rehab of $75k.

Arv my guess is $425k

PITI $14k annually

Owner has made it clear he doesn’t need to make money anymore and offered me owner financing on them.

I have 75k in a heloc, that I don’t really want to max out, but could if I had enough rental income to cover the cost.

Think this is a good deal, it’s a big one for my first.

Guy I’m working with mentioned some business line of credit and some other financing options. Should I go with owner financing and try to cash out refi on these and pay him off or try the private lender way?

I’m pretty good friends with the current owner.