Need help structuring creative 4plex deal

[Chavdar Kehayov]

Hi,

I need help structuring a deal. I found a 4plex with a flexible owner.

Asking price $450k
NOI: $4100 per month
Taxes: $5000
Insurance: $3000
Sewage: $1300
Water: $1000

Owner pays the gas for the whole building about $3500 - $5000 per year
Every unit has separated electric meters

There is a 230k mortgage on the property with monthly payment of $2300 Taxes and Insurance are included in the payment.

I offered full asking price if he agrees on my terms. I would like to take title of the property, continuing making the payments of the existing mortgage and creating a second mortgage for the rest of the amount. I’ll be paying only interest on the second mortgage /depreciated over 30 years at 6%/. After one year I’ll refinance the property and the seller cash out. When I do the numbers looks like that there is about $400 of cash flow.

My question is: Could you please help me /advise me/ how to structure the whole deal and what should be aware of.

What the best way to take the ownership /llc, land trust/. How to avoid the due on sale clause?
What paperwork is involved? What is my risk? What is the seller’s risk? Should I allow him to put a lean again other properties I have to secure the second mortgage that he will carry? How the refinancing is going to work /existing first mortgage, second mortgage/ Title on a different name.

This is my first creative RE deal and I don’t know to structure it. Yes, I’ll use a good attorney, but I want to be prepared with the questions.

Thank you very much for your time.

Your advices are highly appreciated

Best Regards
Chavdar