5 duplexes in a row off market deal

New to Real Estate · Pensacola, FL · Member since 2022 · 11 posts · 1 vote

I just ran across an off market deal for 5 duplex in a row (10 doors) here in Pensacola. This will be my first time out but i ran the numbers and they look great. Problem is the asking price is $1.3 mil, which is negotiable, so with 20% down and closing costs I would need about $270k and all I have is $100k. There has to be a way to make this happen. So im asking you fine folks for input and option . Any would be greatly appreciated.

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Quote from @Bryce Callihan:

1. Approach them with a seller-finance option. $100,000 down, 5% interest amortized for 30 years, balloon payment in five years. If the seller has no plans for the money, this gives them a big chunk to do something different with their life while avoiding taxation on $1.3 million, and it gives them steady income for the next five years before another big payday.

2. Partner with someone. Put this on paper to show the projected return, then pass it around to friends/family that may have money and the willingness to partner with you. You'll probably want to set up an LLC with members and a partnership agreement, so save some money to pay for the attorney.

Where there's a will, there's a way!

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Quote from @Bryce Callihan:

I just ran across an off market deal for 5 duplex in a row (10 doors) here in Pensacola. This will be my first time out but i ran the numbers and they look great. Problem is the asking price is $1.3 mil, which is negotiable, so with 20% down and closing costs I would need about $270k and all I have is $100k. There has to be a way to make this happen. So im asking you fine folks for input and option . Any would be greatly appreciated.
1. Approach them with a seller-finance option. $100,000 down, 5% interest amortized for 30 years, balloon payment in five years. If the seller has no plans for the money, this gives them a big chunk to do something different with their life while avoiding taxation on $1.3 million, and it gives them steady income for the next five years before another big payday.
2. Partner with someone. Put this on paper to show the projected return, then pass it around to friends/family that may have money and the willingness to partner with you. You'll probably want to set up an LLC with members and a partnership agreement, so save some money to pay for the attorney.
Where there's a will, there's a way!
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Bryce Callihan
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New to Real Estate · Pensacola, FL · Member since 2022 · 11 posts · 1 vote
4y
Thx Nathan, man that balloon payment would be scary, this might be to big of a leap for my first time out, lol.
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Jordan Spaans
Investor · Member since 2019 · 10 posts · 15 votes
4y
Quote from @Bryce Callihan:

Thx Nathan, man that balloon payment would be scary, this might be to big of a leap for my first time out, lol.

Bryce, sounds like a neat deal! If you can refinance the loan the balloon payment can be avoided.
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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
4y
Quote from @Bryce Callihan:

I just ran across an off market deal for 5 duplex in a row (10 doors) here in Pensacola. This will be my first time out but i ran the numbers and they look great. Problem is the asking price is $1.3 mil, which is negotiable, so with 20% down and closing costs I would need about $270k and all I have is $100k. There has to be a way to make this happen. So im asking you fine folks for input and option . Any would be greatly appreciated.

Seems like a situation where a partnership through an LLC would be a good choice, especially with someone with experience. Jumping from 0 to a 10-door duplex portfolio with a million dollar loan seems a little much to jump in with alone (my 2 cents) vs starting a bit smaller or having a partner or partner(s). Financing becomes incredibly easier if you have an LLC and an experienced liquid partner
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