Strategy for Acquiring First Apartment Complex

[Chris Wilson]

Hello everyone! I'm a realtor that assist investors in Saint Louis and my parents were investors when I was a kid living with them. So I have a good foundation in finding and analyzing deals especially 2 and 4 family duplexes. I want to invest for myself and I want to start with at least 20 units. I want to reach this goal by the summer of 2022. Also, I'm trying not to reach into my own funds to buy the property. 

My strategy is to do seller financing for the 20% that the loan would not cover and having the seller cover closing cost if possible. If not I want to find a private lender to cover the closing cost and pay them their funds back with a percentage on top. I want to find my first property in Missouri because I have my real estate license in Missouri. By handling my own deal I will get paid a commission. I want to use that commission to help pay back that private lender that they gave me for closing cost. 

Has anyone ever done this? Or does anyone have any input or suggestions on this strategy? Thanks in advanced! 

[Kyle Eckert]

@Chris Wilson Some feedback:

You're probably looking for an off-market deal, most on-market deals arent looking to seller finance. They also don't want to pay commissions.

While the seller technically pays the commission, the buyer almost always pays the commission by raising the price of the purchase.  Then you have to pay income taxes on what you just paid yourself.  It's better to negotiate your own purchases with credits and price reductions than to pay yourself.

Not having any money to put towards the deal will make it hard to get financing, and it will also be a challenge to get past the proof of funds step.

For a 20 unit building, be prepared to set up a hefty maintenance fund to cover repairs.  Just making sure this was thought of since your trying to do all of this with someone else's money.

Good luck!