Creatively use Seller Financing, Hard Money Loan, and Bank Loan

[Wes Kirtz]

Happy Friday BP,

I've gotten some great ideas by reading through a bunch of creative/seller financing strategies in the forums, but I am wondering if anyone has specific suggestions or ideas for my situation below.

Here's the scenario - a lot of moving parts so sorry for the long post - I have attached the seller's financial statement if anyone wants to go all in:

The seller is 72/retiring and wants to unload all of his properties. He has several SFRs that I am not interested in based on location, but he also has an 8-unit complex and owns 7 out of 10 condos under one HOA. For now, only the 8-unit complex is on the market which it has been for over a year since it is priced too high. When I visited the property and asked why he wanted to sell, he mentioned retiring and wanting to get rid of all of his properties. I told him I may be interested in the condos, so his agent gave me the potential income with the actual 2015 expenses from the tax return. Obviously priced too high when factoring in vacancy, PM, etc., but I am looking for a creative way to structure the deal to acquire all of the units.

The 7 condos consist of 5 duplexes built in 2006. Of the 3 remaining units he does not own, 2 are owned by another investor, one by an individual. They have both been contacted and are willing to sell the 3 units. The 10 units are under one HOA that the seller manages and has majority control over.

Side note: Upon obtaining all 10 units, I could dissolve the HOA to "save" an extra 580/unit/yr. Anyone familiar with this or is there a point because it is essentially a forced savings account with my money? Would it may make the properties easier to sell down the road if I keep the HOA? There are a little over $10,000 in reserves currently.

There are places to add value, increase income, and cut expenses (i.e. 8-unit is separately metered for electric) - some deferred maintenance and normal wear and tear, but no major renovations are needed to significantly improve the ARV (which I estimate would be somewhere between 1.65mm - 1.8mm).

The seller is willing to take on some (he did not specify how much) seller financing with a 2nd deed of trust as long as my down payment covers his closing costs.

I have a hard money lender that will lend at 8.5% + 1 point, which could possibly be used for the down payment.

So my question:

How can I creatively use the seller financing, hard money, and a bank loan to acquire all 18 units with as little as possible out of my pocket? I would love to hear any techniques I may be missing including what to offer for the whole deal.

Possible scenario? Use the hard money loan for a 25% down payment. Get a commercial loan for the remaining of the 15 units. Use what the seller would have been willing to finance to purchase the other 3 units outright. Then refinance all properties in a year to get rid of the seller financing and HML.

I would think by offering to buy the other 3 units quickly using the seller financing, saving the other 2 owners the trouble/time/money of getting a real estate agent and putting it on the market, they should be willing to work with me on the price.

Thank you in advance for any and all suggestions/advice!