2 sellers, 14 unites

[Michael Liddicoat]

Hi BP Team,

I've found a deal, but I need your considerably more advanced expertise.

There is a 17 unit condo development in an upcoming area near our medical university.  Seller 1 is the builder and has 14 of the 17 units.  Seller 2 has the original 3 units.  Seller 1 is putting the 14 together with a monthly income of a little over $18,000 (still waiting for lease list) and his purchase price is $ 2,480,000.  Making his cap rate 7.45% if you account for management, taxes and insurance.  That number isn't bad for my market.  This brings the door price to $ 177,143.

Seller 2 is listing his three at a door price of $ 191,999 for a total of $ 575,997.  This drops his cap rate to 4.77% on the three units.  

So here's where your advice comes in:  How do you persuade seller 2 that he is out of alignment with the value of the properties?  I want to package all 17 for an investor, but seller 2 is really overvalued on the properties. 

One option I had considered was getting the 14 at a fair price and using this to bargain him down.  My concern is that he will have the leverage over a package deal for the whole complex because he now has the three I need to sell the entire property.  All comments and strategies are appreciated.