How To Structure a Deal to Buy a Portfolio of 20 Houses From One Investor

5 Replies

Hello fellow BP Members,

I started investing in 2013, have 5 properties (4 single family, 1 duplex).  I have 1 house under contract now and looking for others to buy, fix and hold (or just buy and hold).  I am investing for cash flow.

I have been working with a local realtor and he is putting me in contact with a real estate investor that has been doing thisfor quite a while.  However, he has a separate successful business and is now looking to sell his properties, he has about 20.

My question is, what are some good ways to structure a deal so that it is attractive for myself as well as the investor that is selling his portfolio of properties?  

Thanks in advance!


@Phil Moeller if you listen to podcast #95 the was someone that was taking over his partner's half of 30 something units. he structured it in a way that he pays it out of the cashflow of the properties. 

I thought it was a very interesting option.

I recently made an offer on a property...It was a 10 unit apt building generating 3k a month...He was asking 180k.  I offered him full asking with a 20 year amort, 8 % interest, and a 10 year balloon note which I thought was a stellar deal for him!  I would have ended up paying him close to 300k for it.  He declined stating he decided against owner financing...I found out later on that he is just not ready to sell yet, but still tossing the idea around.  Thats just my example.

One way to do it is with a portfolio loan. Work with a local bank to get a single commercial loan for the entire package. If you get approved, you can probably expect them to finance 65-75% of the purchase price at 5-6% on a 10-20 year loan.  Of course, terms can vary, but this is what other people here have reported. Get the properties appraised and see if you can negotiate a discount for buying the whole package. Don't pay more than appraised value, unless you have a very good reason (its like buying a car at msrp).

If you need to finance the downpayment, you might have to get creative (e.g. use a HELOC).

Seller financing may be an alternative, but you need to ask.

@Phil Moeller

Are you trying to buy all 20 properties from him?

Does he own any or all of the houses free and clear?

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