How to approach multifamily owners who own free and clear?

[Daniel Dietz]

Hello All,

All of the properties that I currently own are inside of LLCs with 2 other partners. Some singles, some duplexs and a 4 plex. I would like to buy something on my own also for various reasons. 

Right now, we finance with a commercial lender and he has good rates but 'only a 10 year lock' with 20% down. I am having a bit of trouble qualifying for a 'conventional loan' due to DTI ratios even though I have great credit.

With that in mind, I am wondering what input you all may have as far as how to approach current property owners that I have identified who own 2-8 unit building that are; getting older and nearer retirement, who are likely to either have their place paid for or very high equity, and who have 'self managed'. The ones I have in mind own well taken care of buildings and stable tenant base.

I guess what do you find typically they are looking for if they are in the mood to sell? Out of the 'work' of tenant management and taking care of day-to-day? Large chunk of cash for ______ ? A steady return that is higher than what they could get in the bank by seller financing?

Thanks, Dan Dietz

[Clayton Plank]

@Daniel Dietz every owner has their own motivations. I present it in a way that would help them. I explain owner financing helps me and them. I don't have to deal with banks, they aren't taxed on a large sum of money and they received a payment every month like the rent but they don't have to do any of the work or have any of the headaches. Some owners want more down to feel better about the deal or to go buy themselves a new toy to enjoy since they will know have more free time and then some don't care about the down payment as much as they do the sale price. I have had a few that were almost 0% interest as they only wanted to look at what the sale price was.