All Forum Posts by: A.J. Vanderhoff

Both of these counters are 30 year. 

Great observation, Ron. Thanks for the mention. 

I offered him a larger purchase price in exchange for terms. My counter offers are: 

1. 1% Interest (instead of 6%), $12k down (instead of $80k), and $535k purchase price (instead of $500k. 

2. 1% Interest (instead of 6%), $0 down (instead of $80k), and $545k purchase price (instead of $500k. 

Both of these options will give me about $1,000 cash flow each month once rents are up to the current market rate. These prices are a win for the seller and these terms are a win for me. 

Equity comes and goes. For someone like me who wants to buy and hold long term with an exit strategy of turning properties into pensions some day when I'm old by selling through seller finance when the properties are paid off - $1,000 cash flow per month with low or no down payment and 1% interest is the perfect deal for me. 

UPDATE: 

After running all the numbers and thoroughly analyzing things I showed the seller that what he was offering, $500k, $80k down, 6%, left me appx. -$400 cash flow each month. I then countered with a couple of options. One option gave him $535k on the purchase price, $12k down, with 1%. The other option I proposed is $560k purchase price, $0 down, with 1% interest. Both of these options are structured so that when all three units are filled and at market rent the property will cash flow about $1,000 a month. 

After examining the analysis I had done on his offer and then taking a look at my counters from the view point of a buyer he realized that what he was asking for it was a waste of time and if he were to put it on the market and try to sell it to a stranger nobody would want it with his numbers through seller finance. 

So, with much larger purchase prices giving him and the beneficiaries of his trust when he passes more money from the property in the end as well as a low or no down payment situation mitigating the capital gains tax he's responsible for, he is understanding the direction we have to go in order for this to be a deal for both him and I. 

The deal has been held up for several weeks. He needs to have the foundation worked on before I will buy it. He has someone who does foundation work as a side business and is taking a long time to get the job done. 

Hope everyone has a great spring! 

 Steve, 

Great insight. This is a strategy I've been thinking about and will be bringing up with the seller when I meet with him next to narrow some things down. 

Thanks so much. 

 Josiah, 

Hope you're doing good. Thanks for the kind words. I remember you being well liked also. 

Yeah, it's a good situation if I can acquire this property. I'm getting my ducks in a row right now and plan to meet with the seller soon to try and iron out a deal that works for both of us. I think you probably know the seller or know of him. 

We should link up sometime. 

 Scott, 

Thanks for commenting. It's good to meet someone else on here from my area. 

It is not in Eugene, thank goodness. The two units are empty because he had a direct marketing mailer sent to him about buying it. He contacted the person to see what the guy would give him but the guy tried to talk him down to a lower down payment. Through that process he held off on filling the units. They're not empty because of needing work. 

I think getting together for a cup of coffee is a good idea. I am eager to meet new people in the area that have the same interest in Real Estate investing as I do. 

Let's message directly about getting in touch. 

 It is a good deal. I have done my own research and come to the conclusion that $500k for this three unit property is less than what several duplexes in my area have gone for. 

I am not going to do any immediate remodeling to it. 

This property has a tenant in one of the 1 bedroom apartments and the other apartment and house are currently empty. The one tenant is paying about $300 less than they should be for that unit (I will get that up to market). 

I am definitely going to discuss a smaller entry fee. The seller is my dad's mentor and the man who got my dad into buying rentals back in the 80's so I am toying with the idea of having my dad sponsor the deal to maybe help his willingness to negotiate. The seller is in his 90s so his heirs is really who will be getting the money from the deal. If I can purchase this property smoothly and it all works out then I know he will be ready to start selling me his other properties in the same fashion so that his trust just receives a monthly cash flow payment from them instead of his family having to deal with the properties when he's gone. 

Thanks for your input. Appreciate it. 

 I posted this the day the seller asked me if I would be interested. I have since then done some analyzing. $500k is a good deal on a property like this in my area. 

Thanks for the input. 

 Yes, managing myself implementing the same self managing system which is in place for the other properties I already have to manage. If I have no money in this (infinite return) then I will have my money, that wouldn't be put into a down payment, for reserves. 

 I agree. Just because you can make it happen to get the keys of a Ferrari in your hand, is not a reason you should purchase one. But if that Ferrari could bring in a return as an asset, rather than being a liability, and it puts a good amount of monthly cash flow in your pocket each month then someone with an entrepreneurial mindset and business plan for it should think about buying that Ferrari. 

If this deal were a dud and did not cash flow and would be just the same as buying something that doesn't bring in any money and does the opposite as a liability does then it would make no sense to buy it. 

Thanks for the input. Much appreciated.