Ten Unit Deal in OH

[Lauryn Meadows]

Hello! I could use some help analyzing/ negotiating terms for this deal. Any creative financing ideas are appreciated! The seller is willing to do owner financing with a down payment.

I think I’d rather do owner financing on the down payment and refinance out in 3-5 years into another portfolio loan.

Here are the numbers.

Asking price $410k

One 6 unit, One 4 unit.

GMI- $5200

Monthly overhead excluding mortgage principal and interest- $1905

$400k financed at 4% interest on a 30 year amortized note- $1910 P&I

Cash Flow= $1385 (this does not meet my criteria)

This property is under value in rents, and owner pays water at the Six unit which cost $500/ month.

Conservatively rent can be increased to $5800 and I’d like to bill back units for water. Subtracting that $500 expense and the new rent the cash flow will be $2485/ month. This meets my criteria.

Estimated value of all 10 units is $450k.

How do I balloon out of the owner financing in 3-5 years with still no money in the deal? Do I just need to pay down the additional equity or possibly the new income will help the value allowing me to pay off the owner the down payment without bringing cash to the table? What am

I missing? Could I position this is in a better way?