4 duplexes for sale- How do I make this deal work?

Question

Hey guys! Im reaching out to get ya'lls opinion on how I can make a deal work. Right now I can buy 4 duplexes in my area (right next to a major University) that are each 2/1 for $600,000. Rents are at $650 a unit which is under market by $100 a unit. Right now the owner is grossing $62,400 in revenue. I could raise rents and bring in $67,200 without any problems. The real attractive thing about the deal is its on 1.56 acres and is zoned for 28 units an acre.... HUGE. How do I make this deal work??? I do not have the cash to put down 20%. I own 1 rental right now that i probably have $80,000 in equity. I only have around $30,000 in cash. Owner is not willing to do any type of owner financing. No question this deal is a game changer but i need to get creative. Any tips?

Jaysen Medhurst · Answer

Price seems high. At 50% expense ration, you're buying a 5.2% Cap. Seems low, even for a hot market like Dallas.

Assuming you do all the due diligence and this looks like a good deal, I think that a partnership is the way to go. Spread out your risk and bring some more cash to the table. Perhaps a local builder, so you can consider developing the other 40-50 units.

Recommend talking to local/regional banks or credit unions. They are more likely to lend on a unique situation like this.

Last thing, what are the comps like for individual duplexes in the area? If they are significantly higher than the $150k/property you see here, might be an opportunity to sell them off individually to raise capital and then use that money for potential development on the land.