Our First Potential Deal!

[Bryant Maten]

Greetings BiggerPockets Family,

I'm so excited to present this potential opportunity to acquire my first deal. Here are the details. 

My mother sister and I are close to raising 25-30k to invest in real estate in Chicago, Houston, or New Orleans as our first re project. 

Our strategy: Acquire properties from sheriff auctions, flip, repay personal loans, and use excess profits to acquire additional deals.  After 2-3 flips, focus on cash flow deals.  

Opportunity: An agent recently sent over this deal.  "7 units, $5,350 gross income, $64,200 ttl ann inc, $10,300 ttl ann exp, $45,800 net op inc, All with individual heating units and are in good condition. Also has a long term storefront tenant." Information provided by seller and has not yet been verified. 

Challenge(s): Sales price is listed at $150k, it's been on the market for a year, and seller wants all cash.  

Question(s): How would you propose/word a deal to the seller with only 25-30k cash to make the deal a win/win?

Thank you for suggestions in advance.

Bryant

[Eric Marofske]

There must be one/more issues with the property causing it to be trading at such a high NOI to price ratio (I'd recommend looking into how "cap rates" function if you plan to be operating in the commercial space). Not a problem if you have the necessary expertise to solve whatever problems the deal presents, but probably not ideal for a novice.

Also, with only $20k available on a $150k purchase, you aren't going to have anythhing left over for rehab costs, reserves, etc. even if you can get in for 0 down