All Forum Posts by: Jason Skinner

Good points and strategy.

James

Thank you for your response. I am trying to envision the structure you are talking about. You are saying I should ask for the seller to carry 80% seller finance and then I make payments to him with 5% interest for a period of time until I pay it off correct?

I am meeting with the owner of an 8 unit off market complex tomorrow. The owner is an older gentleman and has managed this property for years. I want to propose an owner finance deal but I need ideas for a win/win structure. The complex consists of 4 buildings with 2 units each, current rent is $650/unit for a total of $5200 in rents. The owner wants $600k for all units plus the land. 

My idea is to offer the $600k, I pay current owner $2500/month for 5 years and buy out the rest at the 5 year mark. 

Any structure ideas that would make more sense for me and the seller?

Yeah, that makes sense Rick. 

Gino, I was thinking 100% seller finance but I guess if the deal makes sense for me I can see that the seller would be a more willing participant if they only have to carry 20%. Thank you for your contribution, greatly appreciated.

Thank you all for the contribution! I got some useful info here, the reason I want to look at this option is to tackle larger deals without 20% down. This was a thought provoking question for myself, I don't have a seller interested in seller-finance but want to bring it to the table if it makes sense.

I am evaluating 6-10 unit apartment buildings and wondered how others have structured seller finance deals?   

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $110,000
Cash invested: $25,000

Own and manage the property

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

Having multiple units to help mitigate a vacancy and still pay expenses is what drew me to this type of investment.

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

I looked at the MLS every day searching the state of Michigan with a filter to only look at multi-family. I was looking to do a conventional deal with 20% down so I needed to be in the $100k price range. I ended up using hard-money to make the purchase, financed in my LLC.

How did you finance this deal?

Hard money lender 80/20, 30 year fixed rate.

How did you add value to the deal?

No value adds, just equity. Did raise rents 1 time since purchase.

What was the outcome?

This is a buy and hold play, all 3 units were full at acquisition and still have the same tenants. I will have owned it 2 years in April 2024, purchased for $110k and is now worth $160k just from appreciation.

Lessons learned? Challenges?

The challenges I have realized is keeping all the tenants from getting annoyed with each other, I try to make them work it out on their own and always provide alternate viewpoints for them to consider.

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

Mikal Gabler with Kellar Williams was my buyer agent. His office is in Fenton, MI.

Alecia is correct, your umbrella is for liability only. It will not help you with anything you are talking about in this thread. You can hire an independent adjuster for a second opinion if you think the adjuster that was on the case was grossly mistaken. I would take the emotion out of it and really look at the situation from an objective stance.

As for evicting your tenant, it doesn't matter what the tenant or the tenant's lawyer feels is right or wrong. The only thing that matters is what the language in the lease agreement says and whether your judge perceives it your way or the tenant's way.

I am a newer investor in Michigan, I have an accepted offer on a duplex. There is a tenant living in one of the units and currently renting on a month to month basis. What is your process when you acquire an asset with tenants in place as far as background checks and anything else you would do?