Seller financed 16 unit for sale

[Jeremy Adkins]

Hey, all!

So I learned about a very motivated seller of an apartment complex (13 unit) for sale.

I will start this out by saying; I do not currently own any real estate, but have been interested in starting for quite a while.

This seller is getting older and owns plenty of property around my town (all small-mid level apartment complexes) that he is motivated to sell, but is very bad at marketing so nobody knows about it.

This apartment is very run down and quite an eyesore (brick construction so still functional on the exterior) but the tenants are basically overrunning the complex and have started leaving trash and other various piles of garbage in the front so it is obvious at this point the seller does not wish to even bother with this property.

He wants $15k (could possibly negotiations alternative contract) down and to keep his current tenants as monthly payment ($2300 worth) they are currently renting for $500 with 5/13 already rented and is asking only $250,000 for the property.

I feel this deal could be a fantastic opportunity for me to jump in that doesn't come around very often..especially seeing as it is a seller financed complex that is already paying for itself with tenants. This is also in a COLLEGE TOWN! With the right marketing these could be packed.

My only concern is the current condition, lack of down payment, and lack of knowledge.

Is there anyway I could finance this with USDA? It is in a very small town (roughly 10,000) 

Could I also finance the repair costs?

I feel as if I may not be completely ready for this deal, but it is such a great opportunity to get into something I've been wanting to do for a long while.

Thank you for reading all of this and I appreciate ANY insight I could get! Thank you!

[David Dachtera]

@Jeremy Adkins,

If he wants to sell, how can he "keep his current tenants"?

Given the state of the property as you described it, he needs to accept a rather large discount to make up for the deferred management and maintenance and the high vacancy (you said only 5 of 13 are rented).

My advice would be ...

First, learn how analyze commercial multi-family properties (5+ units is commercial, 2-4 units is residential) so you can demonstrate where the property in good repair would be if properly managed and justify the reasons for needing to discount the purchase price.

Second, learn how to find and partner with private lenders to acquire the property and get it back in shape to where you could get a conventional refinance to pay them off.

My $0.02...

David J Dachtera