Owner Financing - 11 Unit Apartment Complex

[Casey Roloff]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $500,000
Cash invested: $100,000

11 Unit Apartment Complex

What made you interested in investing in this type of deal?

I became interested in this deal because of the success had from two previous Multi-Family investments.

How did you find this deal and how did you negotiate it?

I found this deal by searching every single multi-family property through out the county assessor website. I then narrowed down a list of properties that would be within my purchase price range. I found the owner's address and went to their doorstep asking if they were interested in selling. At the time they were not interested but asked me to check in with them at a later date. A year later I wrote a handwritten letter and received a phone call stating that they were ready to sell.

How did you finance this deal?

Initially the seller wanted to sell the property through conventional means, but through my Biggerpockets education I was able to confidently explain property valuations and the benefits of owner financing. The owner agreed to a down payment less than the conventional financing requirement. I purchased this property at a 9.7% cap rate.

How did you add value to the deal?

I plan to reduce management, and landscaping expenses and raise rents to market rent. There is also a large storage unit on-site and I plan to rent that out as soon as the previous owner removes their personal belongings.

What was the outcome?

This is a new acquisition and the outcome is yet to be seen. I plan to refinance through conventional means once I have effectively raised the NOI.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Cheryl Lakey of Chicago Title has set up the financing documents. Strongly recommend.

[Bill Goodland]

Awesome job. You mentioned the seller initially wanted to sell conventional, do you mind sharing what his motivation was for going owner financing? Tax breaks? Higher sale price? Not having to pay a broker? Or all of the above?