Would you try to do this deal......12 unit building???
Okay here is the situation. I know someone personally that wants to sell their 12 unit building. I am really grateful he is offering me a chance to buy it (especially, while it is not even on the market right now). The issue is money. My wife and I just bought a 4 unit 6 months ago. Although it is cash flowing well we do not have enough cash or equity to purchase this 12 unit. My question is what could we do to purchase it? Is seller financing an option???
The numbers are:
Building has been listed in the past for $650K (will most likely appraise for $560K
5 2 bedroom units and 7 1 bedroom units
Gross rents total $9221
Common electrical bill $63/month
Gas bill average $391/month
Water bill average $654/month
Property tax $1700/month
Trash pickup $189/month
Insurance $235/month
25% down on $560K = $140K down mortgage would be about $2255/month
Monthly expenses would be about would be about $5500/month netting about $3700/month before accounting for vacancy and taxes or repairs. What do you all think?