All Forum Posts by: Robert Fontaine

Thank you @Bill Gulley for the quick reply. I am loading the numbers into my spreadsheet to crunch the numbers so I will have a more accurate estimate. I also know managing multi's is a job and will hire it out if I end up with these properties. I know he wants to sell, but unless his situation changed from last summer, he doesn't have to sell.

And @Wendell De Guzman I will call you this evening if that's OK.

Watching the MLS I noticed a group of 7 multi-family properties all located within a mile of each other and owned by one seller. The total of the individual asking prices come to around $1.6 million, total number of units is 23 (there are 6 three unit properties and 1 five unit), and the advertised gross rent per month is $20,800 (the rents are pretty much at market rates in my area). The unit mix is mostly 3 bedroom with some 2 bedroom units and a few 4 bedroom. Based on recent comps, I feel that each property is about $30K over priced.

These 7 properties are located within 1 mile of my properties, so I know the neighborhood and the tenant base. All of the buildings are 100+ years old, are fully rented, and the exteriors are in average condition. This is a C to C+ neighborhood.

Using my 2 properties in this area as a basis, I can say that the 50% rule is pretty accurate, which means that I should have about half the monthly rent to service the debt.

I know the seller is trying to get out of the landlord business because he attempted to sell his entire portfolio of 12 properties last year but pulled these 7 off the market when they didn't sell after 4 or 5 months. So, I'm thinking he could be motivated to move them in a package deal.

My main concerns are that the rents are at market rates already, so there is no room move them higher and that gi-mungus balloon payment that a typical seller financing deal will have. The properties would have to appreciate to around $1.7 million if I was to re-finance them with a bank to pay off the loan. (I'm figuring a deal might be struck at a selling price of 1.4 million give or take)

I don't have the $500+K to go conventional financing, but do have $50K to put towards this deal.

My inner voice is saying, "That's it, you're crazy and I'm checking you into a mental health institution right now." Yet, there's that other little voice that says "There might be a way..................."

So, my creative financing friends, please comment on how would I structure a deal that will give the seller a revenue stream large enough to entice him to make a deal, yet still make it work for me?

or just tell me I'm crazy...............

Great responses. Thanks everyone!

As some of you have mentioned, seller financing might be the way to go. I'm sure there are many posts on this subject here at BP. I'll poke around and see what I can find.

Thanks for the pointers @Brandy Cook and @Gualter Amarelo .

Oh, and @Billy Hills I'm not that Rob Fontaine, I'm originally from the Gorham NH area, but he and I are probably distantly related. Please don't hold that against him.....it's not his fault.

Hello BiggerPockets !!!!!

I've owned a couple of personal residences and currently own 2 multi-family properties in Manchester NH, so I'm not new to real estate. I guess you might say I know enough to know I have a lot to learn.

Since I'm, ahem, middle aged, my goal is to acquire another 5 or 6 multi-family properties to provide income in my retirement years.

I enjoy cruising the MLS listings and running the multi-family listings through my spread sheet to see if they will cash flow and I keep a record of all sold deals so I can see how much other investors are paying for the properties I'm interested in, build a database, and watch the market trends.

My first 2 deals were conventional (20% down, 80% mortgage from a bank), but I'm intrigued by other methods of acquiring properties and I'd like to get one more property before the market turns up too much more but I don't have the capital (I'm in saving mode) to purchase it the conventional way.

Any ideas?

Thanks in advance for the warm welcome.

Bob

PS. I apologize for not having a picture to upload to my profile, but I seem to always be the one behind the camera instead of in front of it and I'm too old to do a "selfie"..........