8 Unit Owner Financing...Is it the right time

[Jared Baker]

Hello BP community.

I recently came across 2, 4 unit buildings (8 units total) that are for-sale and the pricing looks very good.  Doing some quick math the asking price is lower than what is should be which leads me to believe there is something wrong with the buildings and will need some work (which I am ok with).  I just purchased a 3 unit building in August of 2019 so I am still in the process of getting this fixed up and rented out.  Because of this purchase along with the asking price of the 8 units I would not be able to use conventional financing to get this because I don't have $100k+ down payment.  My thought here is to approach this with seller financing/land contract so I would pay the owner X amount for 5-7 years and then I should be able to get a conventional loan on the place. (I still need to do the math and work out all the details)  I will need to get the last 12 months of rent/expenses and some other information from the seller, but my big question is how will I know if I am ready to take this on.  This will be a big investment for myself along with the burden of the payments and managing 8 units (assuming the numbers work out it should be fine).  Is there a "right time" to make the next step or is it more of a "leap".  The other thing is I currently only have $17k in savings, it grows every month though.  Based on my math (again I will need info from the seller to confirm) using the 50% rule by year 7 I will net over $250k (gross income is over $500k)  which should be plenty to provide the down payment and prove to the bank that I can afford the mortgage.

Thoughts????

Thanks BP!!