Real Estate Investor · Shelton, WA · Member since 2013 · 369 posts · 639 votes
During a conversation with a prospective tenant's previous landlord, he asked if i was looking to buy additional properties in TN. He told me that him and his wife were divorcing and need to sell all 14 of their rentals, and would be willing to sell all of them together for a pretty steep discount if sold all at once. regardless of the purchase amount, what are my options for purchase multiple (if not all) properties at once? I have about $50k cash at the moment to play with.
Would it be feasible to use a hard money lender to finance if i planned on rehabbing and selling several of the properties and utilize the profits and my current salary to pay off the rest?
He indicated he wants to be cashed out, so Im waiting on him to email the details/numbers before i pitch owner financing
Hard money rarely works for buy and hold or SFH rentals. If you're going to flip using a HML, you need to plan very carefully and buy this portfolio at a 40-50% discount on current market value. It would be best if you had most of these placed or sold before you close, IMO.
It sounds like a situation where the seller needs cash and owner financing is probably not going to land the best deal in this case. Your best bets may be to find an equity partner or wholesale the deal.
Hard money will kill the deal unless you're planning on refinancing or selling all of them in 6-12 months.
You may also consider going to your bank (if its a smaller local bank) for commercial financing on it. They will evaluate the portfolio as if it were multifamily and lend accordingly.
@Jeff Greenberg has a good idea as well. A twist on that would be to locate a single money partner on the deal.
They decide that they're only wanting to sell 10 of the properties. They are essentially looking to cash out all the equity above what they owe and are willing to carry a contract (length TBD)
Total asking price is $750,382.33 and they're willing to negotiate
Total FMV (best I can assume [Zillow, Trulia etc]without being there) $900k
All properties are rented out to long term tenants
My intent right now is to get all 10 properties under contract, providing the sellers with an option fee for each house, and upon return to the Americas this fall. sell or rehab and sell 2-3 in order to provide enough down payment to finance the rest (if I can get a commercial loan for all 10). If I cant finance, continue to rent the properties and make balloon payments to the owners along the way.
Issues: I work as a contractor in beautiful Afghanistan and will be out of the country within the next week or so
Questions:
Is getting the 10 properties under contract and deal with them when i get home a good course of action if the sellers are willing?
What can be done to ensure a vested interest in the properties? Title lien?
Can I have a lawyer handle all of this being im not currently in the country?
Which type of lenders would be conducive to lending to purchase multiple SFHs? (I don’t have any small bank/credit union accounts, only Hell’s Fargo, HSBC, and USAA)
Any and all input/advice/suggestions are welcome and appreciated.