Deal Analysis + Who has the most creative strategy?

[Dovid Staples]

Hello BP! I've finally found someone looking to sell their MF properties and owner finance them. Three triplexes in Phoenix AZ to be exact, but I'm only focusing on one. Each unit is a 2/1. Per research, he's selling for exactly what he paid for them; 235k. That puts me at 78k per door and $92/sq ft. That seems pretty good compared to the six month comparable sales of $99.8k/door and $132/sq ft in that immediate area. The average rent for a 2 bed is 680.

He's asking for ten percent down with 5-6 percent interest. The only terms I'd accept would be 5% on a three year balloon with a 30yr amortization.

I have a potential JV partner who's interested in real estate, but doesn't have the time. I'm thinking of offering him a 60/40 partnership (the 60 being his share).

I figured the numbers like this:

2,040 gross rent. tenants pay utilities.

minus 10% repairs, 10% cap ex, (it's an older property), 10% management, 7% vacany, $80 tax

= 1,613.2 net

minus debt service ($1,135)

= 478.2 net net

on a 60/40 deal he'd make 286.92/month, 3,443.04/yr, and 13.77% cash on cash return (assuming acquisition comes out to 25k total)

Is there anything here I'm missing? Anything I should be wary of or take into consideration?

Also, what creative method would you implement to acquire and keep one or two of the other properties (they are all equal?

Thank you BP!

PS. bear in mind I'm of course willing to take a smaller share for myself if the JV partner wasn't happy with his estimated return.