Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
General Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 9 years ago,

User Stats

24
Posts
1
Votes
Christopher Za
  • Investor
  • Covington, KY
1
Votes |
24
Posts

Purchasing 2 9-unit multi-family properties from same owner HELP!

Christopher Za
  • Investor
  • Covington, KY
Posted

Hi all, 

I'm making my first post, as I look at starting off in multi-family REI.

I have identified two properties that are being offered by the same owner in the midwest. They are not currently listed. They are being listed for a total of $1.2M.  They are cash flow positive (10% return on equity DP), in good condition, and sound buy-and-hold investments with long term upside (cap rates around 9.5).

My questions largely surround financing.  

I am a filmmaker and so have a very up and down income. Some years it's high, some years very low.  As such, I don't have the traditional steady pay of a "regular" job. I do have some cash saved.  I also have my mother, who is eager to help me with down payments and/or partnering so her current, regular income ($130K/year) might be applied toward my financing deal if we partner in some way.

We could form an LLC, and then try to get a commercial loan, but then it appears that our only option would be something in the 30% down and 5% loan range. We can manage 20% down, but 30% will be a stretch. We both have 800 plus credit scores.

So I'm appealing to the BP community!  Are there any other options that might be available to us?  Some thoughts I've considered but don't know if they are feasible:

1) Could I owner-occupy one of the apts in the two properties and somehow be considered for a residential loan that would cover both? In this case my mother would probably act as a guarantor? Would they require my mother (instead of me) to owner-occupy to qualify? Does it have to be her primary residence? (she is retiring next year but will maintain a $100K+ income from annuities and pension etc.).

2) A variation on the above idea might be to buy the two properties separately. I owner-occupy the more expensive of the two to get better terms there, and then we buy the other under a commercial arrangement. 

3) The owner was willing to do a land contract with a prospective buyer in the past, but that fell through and now he won't do a land contract (he is quite old and just wants to cash out). However, he does appear to be open to "creative" financing, and someone mentioned he might take a 2nd. Despite a bunch of reading, I don't know how that would really work in this situation, because, again, I would only be bringing 20% cash to the deal. 

Thanks in advance for any help/suggestions. I'm just starting out in this world but very excited for the future!  

Loading replies...