Could REALLY use help with creative solution to mortgage issue.

[Brian H.]

Hey everyone,

I am under contract on 5 buildings that span two side-by-side properties. Great rental income. 11 total units, 8 currently rented out to long-term tenants. Just the 8 that are rented are bringing in about $4,200/month... I am under contract for $200k. This is a crazy great deal. When fully rented, they bring in $5,750 per month. My ROI would be about 32%.... they sellers are just way up in their years. They didn't pay a dime for the properties since they were inherited... and are just tired and ready to sell.

My issue is finding a lender. I see now that I need to likely go with a commercial loan with a portfolio lender. I was talking to one over the last few days and even though the rent roll is crazy high, they still need me to make more money (I make about $43k), have a much larger down payment (they said 50%), or a cosigner... The 15Y term kills me with such a high mortgage payment though I would have zero issue paying this mortgage payment with the rent roll on these units and the great rental history. So I need some help either finding a more flexible commercial lender or I need some creative ideas on how to make this work. Also, I have about 80k in capital but REALLY want to conserve as much as I can for a flip once I get these properties under my belt. I have one person on board for $10k of the down payment and maybe one more on board for as much as $20k of the down payment. Any ideas are very welcome! I can't stand the idea of losing this deal!

[Matt Crusinberry]

@Brian H., I would say you have a few options, but keep in mind it sounds like you may be moving toward the syndication realm. This means you're going to have to check with an SEC attorney before you continue down the perceived route that is indicated in this post (FYI). Also, I am personally not advocating that for you at this time (in regards to my post), as there are more qualified individuals here on BP that would be better suited should you choose to move in that direction (if it's possible for you). 

With that said, my recommended options would be to speak with the seller directly. I would make an attempt to either ask for seller financing or a master lease. Try and figure out the seller's motivation for selling and see if you can't come to terms in giving them an alternative option that would suit both parties. I hope this helps and good luck!