Opportunity to purchase a rental book of business

[John S.]

I believe I found a somewhat unique opportunity to purchase a current investors portfolio of properties.  I'm going to try and include as much detail as possible, and please feel free to ask questions or critique as needed. I'm looking for advice on how to best approach this seller and also not make a major mistake for my family. 

I bid on a triplex property listed for $125,000 and my offer was not accepted.  The unit had 3 tenants and was renting for $2525 a month total.  Electric, gas, trash, and lawn care was provided by the current owner totaling roughly $900 a month for 2018.  My realtor told me that he learned the owner was retiring soon and that peeked my interest. 

After some digging into the taxes I learned that the owner of the property I bid on was listed as an LLC and through further research I was able to find the website and owner. He owns 9 (soon to be 7 due to properties being contingent) in one town. I called the owner and had a conversation about his plans. He has been running a successful rental business, along with a irrigation business, and is deciding to retire in the next 2-3 years. He would retire sooner, but was afraid that if he listed 10 properties he would flood the market in this town. The outstanding units he still owns include 2 triplexes, 3 duplexes, and 2 single family homes.

We continued into or conversation and he also asked me about my interests in rentals.  He mentioned that he has not worked out market pricing on all of his properties and does not have an updated profit/loss/expense sheet on every one at this time but he would get it to me hopefully by the end of this week.  He also let me know that he is a licensed real estate agent.  Now this could be a positive and also a negative.  I know that if I deal directly with him, I can avoid the buyers agent fee. Outside of doing my own research and getting appraisals, is there any reason not to deal directly with this owner?  

The total estimated value of the properties is roughly $740,000 and the gross profit after expenses for 2018 was about $80,000.  Now, I wouldn't own these properties for cash, so after loans, my profits would be smaller, but I believe it's still a lucrative opportunity.  

What is the best way to approach this owner after he sends me the details on rents/expenses and his current expected sale values? 

Should I try and purchase the business as a whole including the website and rebrand to a new name or try to "cherry pick" the best properties?

One other variable I'd like to mention is that I am currently approved for roughly $350,000 from a lender.  Cash on hand is only about 40,000 and I could get a heloc for almost 100k.  Would I possibly be able to present this to a hard money lender as a business and get a loan for the total property values and then slowly mortgage the homes?  

How would you tackle this situation and what should I be aware of in this process?

Thank you so much for your input.