All Forum Posts by: Dan Osterman

Thanks everyone for the great feedback!
Ben,
1. 5k, with a good job that will grow this # back up
2. That was a main reason for the post, to find the best wording to present this deal to the seller.
3. Rents can be improved slightly, but with tenants already in place this would be a work in progress.
4. Currently switched to a new company with a 100 % commission, even with great credit they require a year minimum track history. (hence my owner financed criteria)
5. Haven’t verified, but rents = 1900 and he mentioned a 1800 income a month.
6. Yes

Matt, If he's ok with long term cash flow just doesn't want the LL part anymore see if maybe at closer to full asking he'll do owner finance with no balloon or with a 10 yr balloon.
On any of them I would do a 30 amortization schedule though, you can always pay it off within 10 years but then you're not stuck with the high payment when you do need the extra for a repair or whatever else comes up

--Not sure how I would combine 30 year amor, with a 10 year balloon for an owner financed deal. In order to accept the deal I am sure he will want to be paid free and clear in 10 years or less.
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Dan, That’s close to what I have figured out on paper for the deal – the management costs which I will handle. I am ok with breaking even and putting any extra cash I have for the next 6 years and pay it off outright. ---With this in mind, I wanted to pass my strategy along to the fellow BP community to see if I was missing any details that would sweeten the deal in my favor.
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(Unit background – the owner only has the property posted on craigs list, and has broken English (older Russian man that lives 5 states away) I see this being a large part in why the property has been listed for longer then 6 months. No realtor, has never been on Zillow, etc.)
This is my first deal, and I see it being a nice cash flow backbone for future deals. ---
Any and all advice is greatly appreciated!

Details:
North Carolina
120,000 FSBO
4-plex 600sq st each 1br/ba. close to downtown living. solid brick building, new water pump, has washer/dryer on location, no major upgrades needed. all 4 units occupied and rented at $475 (good location, not worried at all on getting renters in place)

I love the property, but need to offer a sound owner finanaced deal that will releive him of having to worry about the property and allow him to enjoy retirement.
Looking at atleast $1800 a month after handling water payment.
My plan is to put 10% down (12,000).
agree to pay $1000 a month = 12,000 a year (this is where I could use some advice to better structure this payment...)
10 year pay off date. (i handle all fees, maintanenece, management etc of course)

Will this work, or will there need to be a balloon payment in place after 5 years? I see that mentioned a lot with owner finanaced deals.

Owner is over 70 and lives in another state, wants to sell and enjoy retirement.
Property has been listed for over 6 months. I went inside one unit and really like the place, no appraisal done - but I am looking for cash flow properties and this looks like a steal!

I plan to throw an additonal 5-10K a year at the principal as well to pay it off early, but do not want to lower the payment term to less then 10 years to be on the safe side. I would like to stretch the term longer....but not sure if the buyer would be interested in anything longer then a 10 year payoff.

Any and all advice is greatly appreciated. Thank you!