Analyzing Large Single Family Portfolio Deal in North Dakota

[Matthew Rogers]

I appreciate any feedback on the following facts of a deal I am considering.

1) Portfolio of 18 single family homes

2) Seller owns all properties free and clear

3) All units have been rented for 7+ years and require significant deferred maintenance/capital expense

4) Bank requires 20% down---seller will carry back the 20%.  He will forgive half of the down payment and wants a 10% equity position or will take on a secondary lien position for a 5-7 year note on the rest at 5%.

5) I have an individual who is interested in partnering on the deal.

6) We have little to no money for reserves.  Require seller to provide deferred maintenance cash contribution??

7) The seller has not communicated a sale price or provided a profit/loss statement to date.

8) Our strategy would be primarily to buy and hold, possibly flip a few.

Bottom line: It's an opportunity to inherit multiple properties at low/no money down.  

I appreciate any thoughts/advice on how to pursue a negotiation on a deal of this scope.  What are the pitfalls/upside that you see?  I can provide more information as needed.  Thanks!

-Matt