4 Unit w/Seller Financing option - suggestions?

[David M.]

Hello BP'ers,

I had someone call me regarding a 4 unit that he's interested in selling, but is concerned about taxes and recapture costs. Property was purchased in 1989 for 165k, current market value around 270k. Owner has an outstanding HELOC of 130k against the property.

Current rents are 750 for 3 of the units and either 550 or 575 for one of them. (All are 2BR, 1BA). The other three units are recently rehabbed with new windows/paint/carpet, but the 4th is not. Owner estimated 8K for a full rehab. The units in this area all get rented fairly quickly, and the numbers I ran conservatively cash flow about 400/month after everything's said and done. (And that's including PM fees)

I can/am qualified for conventional financing, but in this case, seller is more interested in spreading out his tax burden.

Can someone help me come up with an offer that would be beneficial to both of us, or, should I not bother due to the 130k outstanding heloc? He seems "slightly motivated" we'll call it...

Thanks all.