Looking for Help with Offer

[Brian Campbell]

I would like the input from you experienced investors on this situation.

I would like to purchase 4 more investment properties. We currently own 14 units--9 single family homes, a 3 unit commercial building, and a duplex.

The homes I am now looking at purchasing need no repairs and are currently occupied. Two of the furnaces are old and the appliances are old in one of the homes. Appliances are generally included in our rental market.

The seller has several houses and wants to move to Florida and wants to get out of rentals. I’ve looked at most of his properties and these are the ones that I think will work for us.

I am considering making 2 offers--a buy on contract offer, and a buy using conventional funding offer. The seller said he'd be open to selling them on contract.

I’m including the total costs for the 4 units (one is a duplex with one bedrooms each side).

Owner is asking a total of $120,500 for the four properties.
Current rent $1,925/month (rent is low for the market and needs to be increased over time)

Total Monthly taxes: $230
Total Monthly Insurance est: $175

I’m not sure how to structure the offer if I buy on contract (the seller said he’d sell on contract with a 2-3 year balloon payment. Could use some advice here.....thinking of offering $113,000 with 5k down at 6% for 3 years.
My payment would be $647.51/month

The other offer would be with bank financing. I’m not sure how low to go here. The guy is no dummy so I’m not going to steal them but the numbers have to work for me. He’s a realtor and his family has invested in rental properties for a long time.

Looking for advice on how to structure this so it works for both of us. Would appreciate your help with this.

Thanks!