Seller Financed 16-unit with only 8% Down!

[Jason Velie]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $950,000
Cash invested: $80,000

16 Unit property in Randleman, NC. This is the first deal that I partnered with someone on. A good friend found this deal, and he wanted to build equity instead of getting an assignment fee, so we agreed to go in 50/50 on this one.

We were able to negotiate seller financing with only 8% down and 4% interest on a 26 year fixed term. The property should immediately be worth ~$400,000 more after we bump rents, and should cash flow ~$4,000/month to split between me and my partner.

The terms were interesting on this one, because the seller is counting on these payments to supplement his retirement income, so he insisted that the prepayment penalty be equal to that of ALL future interest for the life of the entire loan. We agreed to this stipulation as long as he agreed to allow the loan to be assumable by another party without his approval, in case we choose to sell it one day. One step closer to financial freedom!

[Khari F.]

Hi How would you cash out the equity if assumable? If its assumable would that mean you didnt really sell it? Or Is this just cash flow deal?