Lets make a deal

[Stanley Brown]

There is a grouping of 6-plex buildings for sale...a total of 12 for a total asking price of $3.2 million. This would give me a total of 72 units. The problem is that 1/4 of the buildings are vacant. The tax assessor's office,has these buildings recorded as separate properties and therefore, legally I would have to purchase each building as separate entities. The owner knows this and doesn't want me to take only the occupied properties while leaving him holding the bag on the vacant buildings. He is willing to offer partial owner financing (up to 60%). Can this deal work? If so, how?

[Jon Holdman]

Twelve six-plexes, total of 72 units for the $3.2 million. $44,444 per unit. So, not quite as bad as needing $1000/unit, but probably do need something like $700/unit to be profitable. Especially with the need to fill a bunch of vacancies.

Since they are separately deeded, an option might be to buy the whole mess, clean it up, fill it up, and resell them individually. Would be better with fourplexes (making them elgible for conventional financing), but you might still find investors for six plexes.

Offer them as turn key investments. You put your management in place and include that (for a charge) when you sell the units. Manage it as one big complex but with the buildings being owned by individuals.