Question about a Seller-financed deal
Hello everyone,
There is a package of 16 Single Family Homes in a nearby area that is up for sale. I have emailed the agent associated with the package asking her if seller-financing is an available option in which she replied yes.
I most likely will not be going through with this deal because I am very new to the real estate world and would not want to jump into something too quickly.
Basically I just wanted to post this here and gain some additional knowledge about seller-financed deals. I would like to know how you guys went about structuring such a deal, as I have read that it is wide open in terms of the repayment plan, interest, down payment, etc.
At first glance this package seems like a fairly good deal. I'll post the numbers.
16 properties for ~$725k list price
Currently they are all 100% occupied bringing in $11,500 per month.
Taxes are roughly $20k per year and insurance is another $5k.
There is management company attached to that which receives 10% of the rents so $1150 each month.
At 100% occupancy these properties should bring in close to $8000 a month after taxes, insurance, and management fees.
As I am new to this, I am wondering what else should I be looking out for? I would imagine maintenance costs could add up with having 16 homes.. but besides that?
I am also curious how you would go about structuring this deal using seller-financing?
If I was going to go after this deal, I would try to keep the down payment as close to 0% as I could and maybe stay more toward the list price as a compromise. I was thinking payments around 5k per month, that way I could still make the payments even if I dropped to 75% occupancy, for a total of 6-7 years and then have a balloon payment on the back-end I suppose.
Just trying to gain some advice, as this is pretty much a hypothetical situation for me.
Thanks!