All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Forums
    Newest Posts Trending Discussions Followed Forums Real Estate News & Current Events General Landlording & Rental Properties Buying & Selling Real Estate Deal Analysis See All
  • Education

    Read

    BiggerPockets Blog BPInsights: Expert Analysis Guides Glossary Reviews Member Blogs

    Watch

    Webinars Video Library Financial Independence Blueprint Intro to Real Estate: Rentals

    Listen

    BiggerPockets Real Estate Podcast BiggerPockets Money Podcast BiggerPockets Business Podcast Real Estate Rookie Podcast Daily Podcast (Audio Blog)

    Topics

    Business Operations Finance Finding Deals Property Management Property Types Strategy
  • Network

    Recommended Vendors

    Real Estate Agents Mortgage Lenders Hard Money Lenders Insurance Contractors Investment Companies Build Your Team

    Search

    Members Events Jobs
  • Tools

    Calculators

    Rental Property Fix and Flip BRRRR Rehab Estimator
    Wholesaling Mortgage Payment 70% Rule Airbnb

    Services

    BPInsights: Property Insights Tenant Screening Property Management Lease Agreement Packages

    New Feature

    BPInsights (beta)

    Quickly analyze a property address or ZIP Code to compare your rent in your neighborhood.

    Analyze a property
  • Find Deals
    Real Estate Listings Find Foreclosures External Link Ads, Jobs, and Other
  • Bookstore

    Real Estate Books

    Profit Like The Pros Bidding to Buy See all books

    Featured Book

    BiggerPockets Wealth Magazine book cover
    BiggerPockets Wealth Magazine

    Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! Subscribe today and get the Oct/Nov issue delivered to your door!

    Get the Magazine
  • Pricing
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowBuying & Selling Real Estate DiscussionArrowBuying Seller Financed 4-Plex From a Friend - Looking for Advice
  • Newest Posts
    • Newest Posts
    • Unanswered Discussions
  • Trending
    • Top Discussions
    • Trending Discussions
  • Browse Forums
Search Nova
Create post

Buying Seller Financed 4-Plex From a Friend - Looking for Advice

1 Reply

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subject:
Flipping
  • Posts 453
  • Votes 353

Scott Jensen
Financial Advisor from Blaine, MN

posted over 3 years ago

Hello Everyone!

I have an opportunity to purchase a fully occupied four-plex near me from a long time-acquaintance/friend.  He is winding down his real estate portfolio (he's in his 70's now) and is willing to seller finance the deal with a minimal down payment.  We are in the very early stages of discussing the sale and I was hoping to get some input from some of the awesome people here at BP! I'm a new investor, I've had one single family rental for a year now so I still have a lot to learn.

We are meeting for coffee soon to start discussing specifics... So I'll be asking about the tenants, current leases, rents, property expenses, and financing arrangement. Am I missing anything? Any tips, suggestions that you would recommend to make this process go well?  Thanks!

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subject:
Taxes & Accounting
  • Posts 163
  • Votes 127

Zachery Buffin
Rental Property Investor from Away

replied over 3 years ago

Without knowing the details, as well as not knowing your market, it is hard to offer specific advice on exactly what you should and shouldn't do but the few pieces of advice I can offer are pretty universal. 

First, do the math yourself, when he gives you the numbers and details of the property I would run them through the BP calculator to see if it really is a cash flowing "good" deal. 

Second, don't be so eager you try to make a deal out of something that simply isn't a deal. You are excited, I understand that and encourage you to pursue this business but not into ruin.

Third, the smell test for this thing should be the 1% rule which you can look up on BP for full details and in depth info. If it doesn't meet the 1% rule then you really have to factor in more details like appreciation, the market, cap rates and exits to the property itself. 

Fourth, you said a "small" down payment but what exactly is that in dollars and what part of your liquid reserves and total net worth does that represent?

Fifth, do you have property managers info? Do you plan on managing the property yourself? How recently has it been updated, what does the HVAC and roof look like? What kind of capital are you going to have to put in to rehab any units that might need it upon tenant turn over? 

I will leave you all this to chew on but I wish you the best of luck and hope this is the first of many great deals in your future! If you have any specific questions, if you have any details you want us to review, anything at all post it here and let us all help you build your business!

Rotate Log in or sign up to reply
  • 1
Related Resources Buying & Selling Real Estate Discussion
Start Your House Hunt Right by Asking These Questions First
Is Doorvest a Good Option for Real Estate Investors?
How to Choose the Right Remote Real Estate Market for You
Home Purchase Fall Through? Don’t Panic: Here’s How to Get Your Earnest Money Back
What Is Underwriting? Here’s What to Expect
Resources Read, see, and learn more!
Link Real Estate Investment Calculators
Link BiggerPockets Blog
Link Path to Purchase
Link Mortgage Loans
Link Find a Contractor
Link Real Estate Agents
Link Hard Money Lenders
Link Real Estate Listings

Top Contributors

Jay Hinrichs
Jay Hinrichs
Lake Oswego OR Summerlin, NV
8.45
Score
Mary M.
Mary M.
Portland OR
5.9
Score
Russell Brazil
Russell Brazil
Washington, D.C.
5.2
Score
Matthew Irish-Jones
Matthew Irish-Jones
Buffalo, NY
3.66
Score

Buying & Selling Real Estate Discussion Trending Discussions

  • Foreclosures are coming back
    43 Replies
  • How to fire my selling agent
    5 Replies
  • Need Urgent Investing Advice
    5 Replies
  • What does this clause mean to you?
    3 Replies
  • Sell or not sell? Los Angeles, CA area.
    5 Replies
Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • FilePlace
  • REI Resources
  • Perks
  • Glossary
  • Reviews
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Editorial Guidelines
  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • YouTube
  • Instagram
© 2004-2021 BiggerPockets, LLC. All Rights Reserved.