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Updated over 8 years ago on . Most recent reply

User Stats

29
Posts
2
Votes
David M.
  • Lancaster, PA
2
Votes |
29
Posts

Potential Opportunity - Need Advice

David M.
  • Lancaster, PA
Posted

Hello BPers,

I received a call from a mailer I recently sent out about a 4 unit near me. The owner said he's looking to exit his properties over the next few years, but would consider a good offer on the one I inquired about.

I don't have enough capital to do the deal in cash, but could do it with a traditional mortgage, which I'm ok with, but I'm guessing the seller wouldn't be interested since he'd have to come out of pocket with some money as well.

I asked him if he would be interested in seller financing, and his initial reaction was no, but (being new) I didn't present it very well from what I've been reading.

Comps are in the range of 265-300k in that area for a 4 unit. Current rents total 2985/mo. with 2 units being about 75-100 under market.

Could you offer some suggestions on structuring this deal so it works for both of us? He's not motivated to sell quickly, but was "willing to entertain a good offer." Based on my estimates (8% vacancy, 10% repairs/capex, 8% PM) on 275K w/25% down, it cash flows about 400/month after expenses.

Any suggestions are appreciated.

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