All Forum Posts by: Adam K Garrett-Clark

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Hey Everyone, I'm really curious on any and all of your creative thoughts on how to structure this deal. I'm about to put an a bulk offer on this portfolio, to either wholesale or ideally to wholesale and purchase at the same time. I have some ideas on how to structure this second goal, but would love to hear your feedback and other thoughts. 

Background: Seller inherited this 14 property portfolio from his parents who recently passed away. He doesnt want to be a landlord, wants to get best price and put the proceeds in other investments. He has an agent who is listing two of the 14. I'm working with another wholeseller to offer on all 14, and assign it to a buyer I already have who has indicated a price that would make sense, basically a 10 multiple of the annual gross rent. The portfolio includes 3 properties in Richmond, and 11 in Oakland. There are 3 Fourplexs, 1 duplex, and the rest are single family. Many of them are right next door to eachother so management could be made more efficient. Seller is open to finance, but wants 30-50% down. Wholeselling this would be amazing, but even better would be to get an assignment fee and become,   

Current Offer Plan: Plan to offer 3 flavors. 

Vanilla) 0% Down and 0% interest, 20 year term, Sellers's Asking Price- 8.314 Million

-This would be ideal, the monthly Finance payment to Seller would be 23,094.44 and the Rents will cover that and leave another 10k in cashflow. If the Seller agreed, there would be some closing costs, and the wholesale fee to comeup with. Accoridng to my math that would be 782k roughly to cover agent fees, title, and wholesale fee. But maybe you see it differently? I was thinking I would need to get a hard money loan to cover that, and it would eat up most of the rest of the cashflow and then I would look to refinance within a year or two. But are there lenders that will take that second position deal? Or I would have to find an investor where that 782k can get enough of a return from the cashflow say 10% to be worth it. Any ideas on how to structure that to be most attractive to an investor would be helpful. 

Strawberry) 35% down ( 2.5 Million) 4% interest seller financing at 6.7 Million

- This is likely to be accepted, the monthly payment would still leave 13k or so of cashlfow and that would need to be split 50% 50% with an investor who would become 50% owner with me. Is that the right structure here? or can you guys think of a better way to go about this. Maybe a loan from bank exists for this?

Chocolate) Cash Offer 6.5 Million

I would just wholesale this and collect the assignment fee to split with my wholesale partner. 

Curious what ideas you have on how to tweak these offers so that if anyone of them gets accepted or countered, there is room to get a deal done that will end up being a great deal for either Cash buyer, or investors or lenders that would partner with me to step in as owner. I would manage the units myself. I have agent license and have about 10 years in management of my own portfolio. 

Thanks for reading. 

Hey Abdullah, thanks for asking. We got a 1031 exchange offer (as I expected) they offered 1.2 Million (150k under our asking). Unfortunately, my Sellers held firm and we countered at 1.3. We had a verbal 1.25 on the table but we also had two other buyers in the process of offering, so we let that one go. Those offers never came, one was supposed to be from an affordable housing nonprofit that had access to 4.5% financing, but they put us on ice for a few months while we waited for their slow board aproval process, and then they had some sort of organizational staffing shakeup and recently told us they couldnt put an offer in. So we're at square one. I'm working on the sellers to be more realistic about where the market is on these multifamilies. But if you want to put in an offer, I'd love to help you, I'm probably in the single best position to get you as buyer the best price. Message me. 

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Hey Everyone, looking for help telling the financial story of this investment opportunity. Seems to be a really smart place to park cash at 6% Cap rate, with depreciation tax benefits and projected equity increases in the 23-30% range in the next 3 years. But financing even with 50% down seems to violate the 50% rule. Ful disclosure, I'm an investor and a also a Realtor that is listing this property. trying to get my head around what type of buyer this is a slam dunk case for.  

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