Looking for offer options to purchase a duplex (timing is bad)

[Andy Sabisch]

Have a question and looking for options. Seems like deals are either feast or famine at times as many of you can attest to . . . we found a great SFR that was priced well below market value due to a secondary structure that is past saving and as such, a lender would not loan on the property. The seller dropped the price significantly and we were able to lock in a contract with a cash to close offer. We are able to have the issue corrected easily after closing and plan on doing a cash out refinance to get our cash back out. So far so good.

Fast forward two weeks and a great deal on a duplex came up today that has a 19% CoC ROI and a 23% 5-year annualized return with good positive cash flow from day #1. As you know, good deals go fast and this one will fall in that category. We are looking at an above asking price offer (with our offer resulting in the returns above) with a 30 day to close (NOTE: This is an estate property).

We do have an option for a loan from a local bank but they require 30 days to close barring any hiccups. We want this to be a buy and hold property so a 20 – 30 year term is where we are focusing unless a bridge is better to ensure we meet the 30 day to close and then convert to a fixed term loan.

Be interested in thoughts of BP members as to how you see the best option to structure the duplex deal . . . . HML for the entire purchase price (up to the LTV limits), HML for the purchase that we can convert to a conventional loan with the local bank who already has some of our other rentals, go with the conventional bank and hope we make the 30 days or any other options we might not be seeing.

Thanks in advance for your assistance