Ins and Outs of Owner Financing

[Michelle Phelan]

I am currently in communication with a 75 yr old gentleman who has an off market 4 unit for sale in upstate NY. The numbers are below. I am currently lacking some details and will update the post as I continue communicating with the owner. My question is, what is the best way to put together a offer based on owner financing?

Off Market 4 Unit- Asking $110,000

Rents $3075/$36900 Monthly/Annual

Repairs this year include:

New plumbing

4 water heaters

New rubber roof

Bathroom upgrades

Paint

Stoves

Refrigerators

I am being told the total annual expenses are $20,000. However I am waiting for reply for the breakdown. The rents include utilities.

Numbers Look like this:

Annual Rents - $36900

Operating Costs - $20000 (Taxes, Ins, utilities etc.?)

Left Over - $16900

Mortgage - $7368

Total Income: $9532

[Christopher Hunter]

@Michelle Phelan  Hello Michelle.  What does the seller want?  Seller financing is the first clue.  How much money does he need to be comfortable? What is the interest rate?   He still wants the monthly cash flow. Is there any debt on the property? I did not run this through my analyzer but I would structure the deal something like this: low down $5-$10K.  If he needs the cash, a reasonable monthly payment. If he does not need the cash do a IO payment  for the first couple of years then a ballon at year 5.