I currently own a small portfolio and have the ability to expand, but looking for some insight!
I have a mentor that owns around 250 units in the Grand Rapids area and is starting a slow sell off. 1 of them is a 65 unit complex he is willing to sell to me in 5 years :) long term goal. He offered me one of his 8 unit buildings and we both have concerns....business/friendship, usually don't mix. he has taught me never to get into a balloon payment and the only way I can find to do this deal is commercial financing, so that's question 1. any other ideas for financing?
2nd ? quick look at numbers
Purchase with my "friend/by owner sale" discount!
625/unit 60k/year I own a duplex 1 street over that is currently at $925/month each unit
taxes are 6600.....will be 9200/ year at new purchase price
300/ year inspection fee renews every 4 years.
I am unsure if I want to put up one of my homes for commercial down payment for this return.
Also I have a friend with a 4 unit I can get conventional financing on and am leaning more towards that... suggestions on how to get both lol?
4 unit #s
$700+ each unit..... potential around the 900 area!
Other ideas for financing: Maybe he would seller finance the deals for you. There's obvious benefits for you there, and also benefits for him (delayed tax realizations, continued cash flow, etc). Also, you should be able to get commercial financing with a fixed rate. It's not common, but with a good enough relationship with a bank they do offer it (higher rate of course). Lastly, you could partner with someone willing to fund the deal for you. You'll probably just need to put together a nice proposal/plan for these deals and shop it around at the local banks/credit unions.
No to seller financing....trust me I tried lol.
Partnership I am finding might be over my head when figuring out structure.....I am always willing to buy drinks for some help if interested!
Any suggestions on who to contact about fixed rate commercial?
Too many deals, great problem to have! If you are purchasing the 8 unit at a "discount" due to this relationship I would be less concerned about the balloon payment. I would assume you'll have enough equity in the deal to refi at the end of the loan term, depends on your risk tolerance and what you plan to do with your capital moving forward. Would he owner finance to you? That could be another option.
Your in a great spot with both of these sellers it sounds like....I'd be trying my best to close them both if your comfortable with the numbers.
Best of luck.
This post has been removed.
This post has been removed.
@Nick Watkins I would be happy to review the numbers with you. I have been involved in a few creative financing deals, and have used commercial loans. I also may be interested in a partnership, or wholesaling for top dollar. Investors around the country are looking to invest in Grand Rapids, and often call us for listings. Of course I would love to discuss property management as well, if there is a need. Let me know if I can help.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing