6 duplex packaged deal..... How can I make this happen?!

[Blaine Cox]

This may be a little crazy, but I want to figure out a way to do this deal!!  6 duplexes are for sale as a package deal.  Asking price is $799,900

I haven't gone through them yet so as far as updating, etc I don't know those numbers yet.  My main question here is financing....  I don't have the down payment that would be needed in this deal.  Obviously I won't pay list price, but we are talking upwards of $150,000 down payment.  I'm assuming this would be done as a commercial type loan, but if I were to be able to get the downpayment how would I be able to refinance this deal to pay that back and still cash flow?  Any and all advice is greatly appreciated....  

[David Kazarian]

@Blaine Cox

@Robert Shedden's advice is good. Like he stated there are a lot of unknowns. Obviously building conditions comes into play but you need to look at the operating expenses & the current rents coming in. Make sure there are contracts for the current rents. Also make sure that the contracts line up with the cash going into the account. I have heard of many stories where there were contracts presented for the renters but the cash coming into the account didn't line up. Run the numbers! See if it makes sense. In order to get a loan you will need 1.25 DSCR (debt service coverage ratio). Some lenders I know will do for less but the goal would be for you to raise rents on non-performing units, which there probably is.

You can also buy the portfolio, fix up individual buildings then sell off the ones you don't want. Pay down the mortgage and improve cash flow that way.

Happy to introduce you to some lenders if you need them.