Creative Mulit Family Offer Ideas

[Shane O'Donnell]

Fellow BP'ers: I'm part time real estate investor looking to elevate my investment strategy into multi family. We've both been researching markets, educating ourselves on best multi family best practices over the past 8 months.

I'm a successful corporate exec and have been involved in real estate on and off over the last ten years (but not multi family).

Me, along with a partner of mine, plan to purchase a small to mid size multi unit property in the next 3-6 months (up to 30 units)

We could assemble a team in the area we're looking to purchase multi family but I don't have much expeience getting really creative with a multi family deal. SO.... I need help with ideas on how to structure a deal that we're considering.

Here are high level details on property:
* 18 Unit property (owner operator currently)

* 9 Units recently renovated (the remaining 9 units are being personally renovated by the owner/operator)
* Value add property for sure (raising rents, potentially finishing the 9 units that need renovating ourselves, etc.)

* Tier 2 City - B Neighborhood

* Property is Not cash flow positive while under construciton (50% vacancy now)
* Listing the property for sale privately - I could purchase if I can figure out a way to do so while it's under renovation

* Me and my partner have plenty of funds for a down payment

** What options could I consider, if the numbers makes sense, to purchase the property now, while being renovated so I can capture the upside? 

Thanks all!  Happy  to provide more detail where needed.

[Mike Dymski]

Most properties in this market have much of the upside already included in the price if the current owner is savvy enough to recognize the opportunity and able to execute on the rehab.  If the owner is having trouble with the rehab, out of money, not savvy, or just burnt out, there is an opportunity.  Find out the sellers needs and propose an offer that solves them.

You can see if seller financing is an option and you can talk with local lenders to find out their appetite for multifamily, for this particular property, and for you...along with finding out about their lending products.  A construction perm loan would be the applicable product.  It would fund 80% of the as-completed cost, provide an interest only 6-12 month construction period, and then start permanent amortization after that period (or some similar structure).