Having trouble on what to offer for a 6plex

[Daniel Perea]

Hello everyone, i appreciate you for taking the time to read my question/post. There is a 6plex for sale here in my town of Deming NM. I recently spoke with the lady that is selling the 6plex. She told me the reason she was selling it was because she was tired of cleaning after people when they move out, that she has too many properties to worry about. She is currently asking $199,000 for her 6plex, and its been in the market for about 2 1/2 years. She told me that she will not do owner finance. Two apartments are 1 bedroom 1 bath and they are currently been rented for $400, the other four apartments are 2 bedrooms 1 bath and are been rented for $450.

I have recently been approved for a $95,000 home loan. i have about $10,000 that i been saving for the past 6 months specifically to invest in real estate. Here is my question, how much should i offer this lady for her 6plex? and how can i do it to raise the extra money that i need? Or what other options do i have to buy this 6plex? What are my options here? is it possible that i can buy this 6plex somehow?

[Ronald Perich]

@Daniel Perea,

Welcome to BiggerPockets! This site is a great way to learn more about real estate investing.

I see where you are a truck driver. This probably means you have a lot of time to listen to the radio/iPad...

Perhaps you could gain some additional education by listening to the BP Podcasts, from start to finish. To help specifically with your question, check out:

Getting Started in Real Estate and Raising Money with Brian Burke

Cash Flow, Creative Finance, and Life with Ben Leybovich

The Ultimate Beginner’s Podcast For Real Estate Investors

Commercial Real Estate Investing With Frank Gallinelli

Buying Apartment Complexes, Raising Millions, and Building a Profitable Business with Ken McElroy

40 Quick Tips for Buying Your First (or Next) Investment Property

The home page for podcasts is at:

http://www.biggerpockets.com/renewsblog/category/p...

And perhaps you should put pen to paper and see if this is actually a good deal or not. Let's assume you can get it for $175K. You'll need a minimum of $35K down, leaving you a balance of $140K. 

What will your payments be? 

What are property taxes?

What expenses to you have to pay?

Have you figured out your "vacancy" expense? (hint, how much do you "lose" because it's vacant)

What's your monthly repair budget?

What's your budget for capital expenditures? (on A/C, roof, sewer line repairs, etc)

After all of that, do you still make any money?

And then you have to ask why it hasn't sold in over 2 1/2 years. And why all of the pictures online show vacant units (that's plural)?

From a financing perspective, it will be much easier for you to find financing for 4 units or less. Listen to those podcasts to learn why.

I didn't directly give you the answers you were looking for. As Napoleon Hill said in Think and Grow Rich, "Anything acquired without effort and without cost is generally unappreciated". 

I appreciate your passion for getting started, I really do! But if you are asking these questions, it might benefit you to spend an entire weekend doing nothing but educating yourself in some key areas.