$1.5MM 62-unit Owner Financing Deal

[Jonathan Johnson]

Hello BP,

I have a goal of 100-units and I currently have 5 and a full time job. An opportunity to purchase 60 or so with apartment and several SFH has come up with an option of owner financing.

The opportunity lies in that they are top heaving with paying $100k/yr for 2 maintenance men and the property manager. The spread is approximately:

15 efficiencies for $600

25 1br apts for $700

13 2br apts for $800

7 SFH for $800

All primary utilities included, which for the area is about $125 under market.

The complex is about 90% occupied and putting all the profits back into repairs. I still need to see the condition of the insides of the apartments, but they don't look too bad. I estimate about $1000 repairs per apartment and $2000 renovations per apartment.

The owner is open to owner financing and I'd like for it to be the down payment.

I will most likely start an LLC during the purchase if my offer is accepted.

How do I calculate the price of repairs & renovations & operating costs? I get lost when I'm scheduling a commercial loan + owner financing for the DP + repairs/operating 

[Bjorn Ahlblad]

@Jonathan Johnson congrats on the find! Not every day you come across a complex at 25k/door and 43K/mo rents! I'd proceed carefully here as we are trending into the 'too good to be true' territory. Due diligence needs to be extra thorough. Get all the numbers, rentroll, leases, financials and leases. Get an inspection, bids from contractors and walk every unit; especially check out the neighborhood, crime rate, look for boarded up buildings etc. All the best and keep us posted!