Multifamily Avg. Per Unit Cost?

[Josh Ashland]

Hello BP Community!

I'm looking to get into small to medium multifamily properties in the Twin Cities metro area. My goal is to purchase this property utilizing creative financing, more specifically seller financing. 

Through the enormous amount of research I've done, a common strategy is to find tired landlords with a ton of equity or fully paid off that are looking to move on from their property because they are tired dealing with tenants. This has usually been geared towards single family houses. 

Has anyone here seller financed a multifamily property? If so, what are some strategies to target those owners directly?

Any help or advice would be greatly appreciated!

[James Hamling]

@Josh Ashland your question is answered by simply putting yourself in that targeted persons shoes. 

Say you own a 24unti building, have had it 22 years. 

If you've had it 22 years, we can safely assume insights like one knows what they are doing. So, why would that person be willing to sell and most importantly, with seller financing. If it were you, what would you need to do it? Yeah, first and most importantly is TRUST. 

Who would hand away a multi-million dollar anything, blindly, to who-ever? No, they need to TRUST that person not only will pay, but that they have the ability to run the place. And someone of 22yr ownership, they have an exact specific way they want things done. 

Now, why wouldn't they sell it for cash at closing? Because there is no shortage of buyers with $ to buy it. Why would you? Yeah, right, because your getting a better deal from that seller financed buyer.     Ok, so when a person can sell a polished-turd of a property at a 7-cap, how are you going to give a "better deal"? Are you going to do a 4 cap? How will you make $ and survive? 

Right now in this market, your not going to get some 10-cap with seller financing, that's just a pipe-dream. Only if it's got some serious issues, massive problems that will require serious work and capital to correct. Because if it didn't have those, again, they could just sell it to someone who brings cash at close.