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Updated over 9 years ago,
Need help analyzing this seller financing
I am looking at purchasing a 27 unit that has seller financing. Here are the terms of the financing:
Purchase price: $339,000
Down: 25%
Loan terms: 5 year term at 6% with a negotiable amortization schedule
The units are 1 bedroom/1 bath at $450/month and 100% occupied. The big expense seems to be landlord paid utilities which are averaging $170 per month per unit. The current rents are about 15%-20% below market.
The downpayment wouldn't be a problem but my real concern is whether the cash flows would be positive given the 5 year loan term. Any advice would be appreciated!