24 units. Options for a win win?

[Benjimen Elliott Johnston]

I have a partner who has found a 100% financed deal in rural area. Owner is about 75. 24 units(duplexes) so 12 buildings. My friend has been managing this property for 4 years( screening tenants and leasing properties). Only one unit is unoccupied(painting to turn over for a new tenant) and one unit is lived in for free by an on sight “cleaner” when apartments turn over. Four units are rented through HUD. The owner and family do maintenance and lawn service, so I’m not sure if I can get an accurate figure on what that would cost. They are all 3BR/2BA and rent for 550/month. Owner wants 950,000 at 7% for 15 years. He started at 1.2 million. Payment around 8,500/month. I believe rents can be raised to 600-650 but need to research area and don’t want to plan on it. I’d prefer to stay conservative. I’m waiting on tax and maintenance costs( pest, parking lights, repairs, lawn). The units look well maintained on the outside. I’m told they are well taken care of on the inside as well. My concern is cash flow for now and if I want to sell in the future. I don’t want a second job as a maintenance man for 24 units if they just break even. I’m looking for creative alternative financing options that would be a win win. I’m told owner wants cash flow for retirement. Partner would handle the leases and I would do inside maintenance. It seems like a decent deal as is, but if they become harder to rent due to no growth in area then it may become a real headache to cash flow. Any advice would be appreciated. We are still in pre negotiation phase.

[Julie Haveman]

I wonder if they would do a 15 year loan with a 30 year amortization at like 6%. It's hard to cashflow with a 15 year amortization. I would figure for each duplex $100 each per month for maintenance and $100 per month for capex. I would also raise rents and get rid of cleaning lady. Owner finance is so great that I would try to make the numbers work! Offer a number that works, they might just take it!