11-house package deal, ideas on financing it?

[Will Porter]

I have a lead on an 11-house package deal in a town on the outskirts of Houston, TX. It's an older couple that are tired landlords and are ready to get out, but they don't want to owner finance.

• Asking: 445,000 for 11 houses (all shapes and sizes; a few duplexes, mostly SFRs)
• Cash flow: 1,544/mo on the whole package (calculated with 100% financing at 8% in the BP calculator)
• Cap rate: 12.96%

Does anyone have ideas for how to finance the purchase of this package of houses? I don't have $445k sitting around to pay cash, and I'm not really sure how I could do hard money or BRRR when all the houses come under one financing package. And of course 11 houses at once will make any conforming lender run and hide.

Seller is refusing to allow me to cherry pick houses, understandably.

Any ideas for how to proceed on this?

Thanks!

[Art G.]

My first thought is to offer them more money to do owner financing with you.  Sounds crazy, but not if you can get that many units with owner financing. Either increase the purchase price or tell them you will do interest only for the first two years. Then in 2 years you will do a balloon payment for remaining balance. This increases their overall profit and gives you time to accumulate more of the rents as a down payment for a mortgage, and or gives you more time to find an equity partner.  The equity partner comes in with the major down payment and you give him half your interest in the properties. You benefit by not having to put the large down payment he benefits because you found him a good investment.  Also you can look into note buyers for them. Tell them to do the deal as owner financing and you will connect them with an investor that will by the mortgage from them in all cash.

Just some creative thoughts on how I structure deals. Good luck!