Specialist · Springfield, MO (springfield mo) · Member since 2016 · 48 posts · 12 votes
I've come across a few 100+ unit portfolios of single family and small multi-family properties in my local market that I'm interested in purchasing. The main reason for my interest in these specifically is that they offer owner financing and I don't have the equity or cash to get in another way at the moment.
My main question is, assuming I put very good property management in place, get a good price based on actual rent rolls and P&Ls, and due my diligence thoroughly (including inspecting every unit), is there any downside that I might be overlooking?
Keller, TX · Member since 2015 · 49 posts · 25 votes
10y
I think a portfolio can be a good way to go, but like most people who will lend you money, you will probably need a down payment. You may find an owner willing to self finance the deal, but they usually want money down to see you are serious.
If you buy a portfolio deal, make sure you check every individual property. Make sure they are actually rented. Check deferred maintenance.
Keller, TX · Member since 2015 · 49 posts · 25 votes
10y
I think a portfolio can be a good way to go, but like most people who will lend you money, you will probably need a down payment. You may find an owner willing to self finance the deal, but they usually want money down to see you are serious.
If you buy a portfolio deal, make sure you check every individual property. Make sure they are actually rented. Check deferred maintenance.
Specialist · Springfield, MO (springfield mo) · Member since 2016 · 48 posts · 12 votes
10y
Thanks @Tim W. I wondered about the down payment. Is it possible to get a down payment through a second mortgage from a traditional bank? Seems like they wouldn't want to be in position 2...
Keller, TX · Member since 2015 · 49 posts · 25 votes
10y
Im not a pro but I don't think a bank will want to be in position 2. This is where its time to get creative. Home equity loan, personal line of credit, look for private investors, look for family, etc. If its a good deal, other investors will jump in on a partnership. If you cant find other investors that like the deal, its probably not a deal.
Investor · Daphne, AL · Member since 2014 · 1k+ posts · 242 votes
10y
The only way to make this work is to have cash to put into the deal. It doesn't necessarily have to come out of your pocket, but it can't be from a second mortgage loan. Good luck.
Investor · Daphne, AL · Member since 2014 · 1k+ posts · 242 votes
10y
The only way to make this work is to have cash to put into the deal. It doesn't necessarily have to come out of your pocket, but it can't be from a second mortgage loan. Good luck.
Specialist · Springfield, MO (springfield mo) · Member since 2016 · 48 posts · 12 votes
10y
Just an update on this...
I talked to the Agent today and she told me who the owner was. He's a well known slumlord in our area who's 200k behind on taxes. Good thing I knew the name when she mentioned it:)