Navigating seller financing on a multi-family (1st property!)

[Daniel Bernard]

I’m new to real estate investing and think I may have a good deal, but I’m a little unsure of my next step and thought someone would know!

Deal breakdown:

100k multi family 4-plex that the seller inherited from her parents. It’s been on the market for a while because the agent says that the buyer doesn’t want to do the work to provide the rent records etc. until late in the process. Evidently it was on paper from her parents. She says the property cash flows every month and has tenants locked in.

My questions: 

1. Setting up the financing offer: I’m trying to understand how to structure a proposal to be interesting to her but also good for me. I don’t have a ton of money for a down payment which is my biggest hurdle.

My thought: offer an option on a 30 year scheduled with a 5 year balloon with nothing down, but I’ll pay 10k over asking price. This way I can get right into a cash flow situation, and have 5 years to refi the loan with traditional lending.

2. At what point should I ask to see records/do a walkthrough etc.

3. Setting up the mortgage documents: should I find a lawyer? Or will a title company help with that?

4. If she says no, should I try to get a hard money loan? With a hard money loan do you still have to provide a down payment, or is it just a lump sum that’s not connected to a property and just based on your credit worthiness? Trying to understand the hard money process. 

Any other big things I’m missing as far as trying to understand this property? Please poke holes in this/tell me where I’m off base. I think I may have found a great deal but don’t have the down payment ready right now so I’m trying to get creative. 

I’m sure there are things about these topics, but maybe not all together.

Thanks!