Partnerships with Sellers

[Tom Horan]

Hey BP - I have a property lead that is a current duplex in the Denver Metro area. The numbers don't look great with an outright purchase at 20+% down. COC, Cash Flow, Down Payment - nothing really looks too great about it. I am looking for thoughts on partnering with the seller on a scrape and triplex build on the property. They owe approximately 130k on their loan and market value is probably 400-425k AS IS. New triplex would be worth 650-700k+ especially with a track record of high rent and low vacancy.

In this area - a new triplex would gross about 6k in monthly rent. Looking for advice on what would make this offer enticing for a seller. Equity share at sale? Cash Flow cut? Has anyone had experience using a seller as a partner? Thanks for your thoughts.