Bulk Real Estate Deal Analysis and Strategy

[Kevin Ziebell]

Another real estate investor is moving into a bigger "deal" and wants to move out of SFH management. 15 total properties in a small "bedroom" community. One home is on the market, but the others are open for discussion about a bulk deal. My assumption at this point is that he wants to spread the capital gains over several years. If I could come in with a purchase/long term lease option deal, he will deal.

I can break out each of the properties individually, but the summary for now is:

12 SFH, 3 small commercial properties. All but one (a small former bank) are currently rented.

Total asking price - $1,135,000

Tax value - $1,071,360 

Current rent - $12,400 (assumes $1,000 rent for bank when it gets rented)

Annual Taxes - $20,170

Annual insurance - $8,900 (estimated)

I've done calculations of PITI, Operating expenses and NOI and came up with a CAP of about 9%.

It seems to cash flow with the current renters and I know the property conditions will make a difference as well.

First question is about the overall deal first, second is how to figure some sort of purchase/lease deal that would work for both of us. First so I can get the cash flow/equity gain and he can move on and reduce his capital gain hit each year.

I understand he's open to a partial sellers financing as well. I currently only have 3 rentals with separate financing so I'll have to work to get into commercial lending as well...

I'm open for suggestions and comments. Let me have it.

Thanks.