Updated over 3 years ago on . Most recent reply
Creative Financing for Multifamily
Have a deal under contract, total number of doors/units 16, the purchase price is $1.2 M, the seller has quite a bit of equity in the property, we don't have an appraisal yet, but the seller, arrived at that number from tax value several years ago, and is not using the CAP Rate rule or NOI.....My cash is tied up at the moment, what I have, he is willing to take a note for $300K, which means I have to $900K Financed, he gets $300K, and $600K pays off his current loan? Easy right? Most lenders with want 20-30% down in this situation, especially this being our 1st Multifamily, I have 2 things, I am looking at is the new interest rate, and this seller has a interest rate in the 3%, so his money was much cheaper that what I can get, and not having a down payment? Interestingly enough, these units are not in a LLC or Corporation, which we know is a NO NO, here is my question, can't I add him to our Corporation, or just give him shares as collateral for the $300K, or have him create a LLC and JV with it, he still retains some ownership until I improvement and refinance, your commentary, and thoughts are greatly appreciated......