Seller financing on a 7 property package deal ??

[Robert Fontaine]

Watching the MLS I noticed a group of 7 multi-family properties all located within a mile of each other and owned by one seller. The total of the individual asking prices come to around $1.6 million, total number of units is 23 (there are 6 three unit properties and 1 five unit), and the advertised gross rent per month is $20,800 (the rents are pretty much at market rates in my area). The unit mix is mostly 3 bedroom with some 2 bedroom units and a few 4 bedroom. Based on recent comps, I feel that each property is about $30K over priced.

These 7 properties are located within 1 mile of my properties, so I know the neighborhood and the tenant base. All of the buildings are 100+ years old, are fully rented, and the exteriors are in average condition. This is a C to C+ neighborhood.

Using my 2 properties in this area as a basis, I can say that the 50% rule is pretty accurate, which means that I should have about half the monthly rent to service the debt.

I know the seller is trying to get out of the landlord business because he attempted to sell his entire portfolio of 12 properties last year but pulled these 7 off the market when they didn't sell after 4 or 5 months. So, I'm thinking he could be motivated to move them in a package deal.

My main concerns are that the rents are at market rates already, so there is no room move them higher and that gi-mungus balloon payment that a typical seller financing deal will have. The properties would have to appreciate to around $1.7 million if I was to re-finance them with a bank to pay off the loan. (I'm figuring a deal might be struck at a selling price of 1.4 million give or take)

I don't have the $500+K to go conventional financing, but do have $50K to put towards this deal.

My inner voice is saying, "That's it, you're crazy and I'm checking you into a mental health institution right now." Yet, there's that other little voice that says "There might be a way..................."

So, my creative financing friends, please comment on how would I structure a deal that will give the seller a revenue stream large enough to entice him to make a deal, yet still make it work for me?

or just tell me I'm crazy...............