31 unit apartment- owner financing

[Misty C Traylor]

I have the opportunity to purchase a 31 unit apartment complex for 1.6 million. CAP rate of 6.5%. Current manager not aggressive so there is opportunity for improvements. Open basement with opportunity to create tenant storage rental space. Roof and CH&A units up for replacement soon. The owner is willing to owner finance. If you had the opportunity to set up owner financing on an investment like this what would your numbers look like? Would you offer 20% down? What would be an acceptable interest rate for owner financing? I want the offer to be good and would like this groups opinion on what a good owner financing offer would look like that would benefit the buyer and seller.

[Scott Mac]

Hi Misty,

Make sure you have your bank financing set up, that will tell you the percent you need to have down as well as other things.

The Roofs and HVAC's may be a stumbling block for some lenders (I assume the parking lot looks like an Alligator) and it may also be an issue a lender wants solved soon after takeover.....

What I'm saying is make sure you have a lender lined up who will press the go button on a property like this with OWC unless it's 100% OWC which is worth asking about (as well as length of carry = when you need to have it in lendable shape).

 just my 2 cents.