Need advice on purchasing seller financed multis

[Ben Bramley]

-Long post-

I'm a newbie to investing and have my first potential opportunity to purchase a multi family and possibly a second from the same sellers. This is something I've been planning to do for a long time but a good opportunity hasn't come until now (seemingly). I'm first and foremost looking for a multi unit to live in myself and rent out the rest of the units. I live in a very desireable city and the houses I'm currently interested in are in two of the best neighborhoods. Through a conversation with the representing broker, his clients have two multi units they own that they plan to list soon, but are willing to entertain the idea of selling to me before they hit the market which is ideal for me. They are also very interested in doing this through seller financing, which was initially brought up by the selling broker himself. One of the properties is a 3 unit and the other is a 4 unit. I would plan to live in the 3 unit as it's in our preferred neighborhood and purchase the 4 unit as another investment. Both of these properties are outdated and clearly in need of some updating and are fully occupied with tenants. (DISCLAIMER: I haven't been inside either of them as of this post and would not finalize any deal until I thoroughly went through each property to get a full scope of their conditions. I'm making this post to get a better idea of what route to take and advice on how to approach this so when the time comes to negotiate I am as prepared as I can be.)

Now to numbers. I have about 150k to work with for down payment, slightly more if need be, but I'd also like to save some cash if possible for some off the bat renovations, especially for the one I'd plan to live in.

The 3 unit would likely cost ~800k give or take. When I mentioned a ballpark 100k down payment for that one the broker said that he belives that'd be a solid number the sellers would work with. If I go and see it, like it, and a CMA justifies that price range, I'll absolutely go for it.

The 4 unit is likely going to have them asking around 1 million for. It's in arguably the most sought after neighborhood in the entire city and multis regularly sell for well over a million in this area. This is not a property I'm as determined to get, but if I can make it work It'd be an excellent investment long term. I'd like to take advantage of the opportunity to purchase these properties off the market and utilize the seller financing option. Keep in mind the going rents in my city are at a premium, and inventory is scarce so there is very high demand for rentals.

What I need help with is putting my ~150k to best use possible. I realize for ~1.8 million in assets, it's not a large down payment overall. I'm hoping I can come to a deal with them for both properties, maybe with this as the down payment for both.

What I know about the owners is that they're in their 80's and aren't able to manage the properties any longer. Their children are currently in charge of the properties and either have no interest or are too busy to take on the responsibility themselves. It seems like the kids want to cash out these places and move on.

I'm going to call the broker tomorrow and get a better sense of the situation, what the sellers ultimately want, and let him know my intentions. I don't want to waste this opportunity if there is a way I can make it work. They obviously know they'll have no problem selling any of their homes, so I need to be able to lock them down.

I understand I might just not have enough capital to make this work, but am curious what someone more experienced than me in investing would do in this situation. I really want these properties and I really want to make investments that will pay off for me long term.

How would you best leverage the capital I have to make this work? Would it make more sense to look into private money or elsewhere to fund some of this? How can I best approach the broker/sellers to make an offer appealing to them? What questions should I be asking?What is something I might not be considering going into this?

Any advice at all would help. I really want to make this work for myself and my family. This is the best (potential) opportunity I've had in over two years of searching. How can I make this work?