Commercial Multiplex Opportunity, Any creative financing options available?

[Samson Kay]

In my travels these past few weeks during my journey as a new real estate investor I happen to be presented with an opportunity to buy a 5-unit Town house style multiplex. The seller is a client of one of my contractors and my contractor tells me, that the seller is motivated (just suffered from a stroke, and has some other health issues) and is looking to get out of the real estate game.

I haven't met the seller yet, but I have been by his property, and it has HUGE potential. It is a 5 unit (3BR-1BATH) town house all adjacent to each other with a garage per unit and additional parking. The area is decent. I see this a a buy an hold for a few years and potential condo conversion.

The asking price is 650K. Gross operating income is 90K annually which is a cap rate around 13%. Comparative cap rates in this area is around 10%.

The owner owns the property free and clear, but it seems like he doesn't want to deal with commisions for a listing agent and would rather sell to another investor. I'm sure he may also take issue with capital gains when he goes to sell.

So I'm trying to schedule a meeting with the seller if we can talk about it. I wanted to see any of YOU BPer's had any insight on how you would approach the seller, and if you had any ideas on creative financing. Like seller financing etc.

Also I need some coaching on how to negotiate the price down, Although I like this property, Comparable multis in this area are going for 4-500K. Which is more in the range that I am thinking.

Thanks in advance!