I am currently analyzing a 4 plex, and will be working with a partner who will be fronting the money for the down payment and repairs. To get the proper return for him the deal would need to cash flow $400 a month. I would of course love it to cash flow another $400 a month for myself. To gain those numbers I would need to offer 100k under their asking price. To have a higher chance of making the deal happen is it worth sacrificing some cash flow for myself? Or should I stick with $100 a door? I will be doing the PM. If it matters it wouldn't be my first deal and it's in the north Houston area. Thanks!
A piece of a deal is better than no deal at all. If you build a track record of successful deals like this and show you can keep providing consistent returns for investors, you'll have more credibility to raise capital.
@Christopher Salazar That is certainly true. Funding is not the issue at hand here though. I would rather make some money rather than no money, but I don't want to end up just doing anything to simply make a "deal" happen, when it's really not a deal at all.
How much are you spending in order to get a $400 monthly return is the question. How much would you be spending for an $800 monthly return?
@Brandon Ingegneri I will be putting out no money. Is that your question or what's the price difference?
You'll never get it for 100k under if you never ask. Give it a shot. You can always go up from there and they may counter showing you their hand.
Hi @Daniel J. I understand your position; however if I could make more than $100 a door even if it was less than $400 a month I would more than likely do the deal.
Experience is worth far more than $400. You won't regret making a small amount of money to learn a ton about the industry, establish your brand, acquire a partner, and have a MF property in your portfolio. You might regret passing up an opportunity to do just that. Definitely worth it as long as the deal doesn't lose money for any parties. But don't be afraid to ask less than the asking price enough to make you blush! The numbers must work for you and your partner or it is NOT the deal for you. Best of luck!