I am looking to do my first package deal of 4 properties. 3 properties have paying tenants and 1 property the seller have their property manager living in the home rent free. The sellers are out of state owners that inherited the properties and looking to sell. I spoke with them today to see what would be the price they are looking to sell all 4 properties for in a package and they couldn't give me a price. I told them that I would give them a call back on Monday to see what number they came up with and so that we can negotiate on a purchase price. All properties are in good living conditions.
Here are the Properties rent and size
1. 2bd/1ba rent $300 per month 1050sqft
2. 1bd/1ba rent $325 per month 645sqft
3. 2bd/1ba rent $350 per month 1050 sqft
4 3bd/1ba property manager lives rent free could rent for $600 per month 1200 sqft
The sellers chose to do low rent because of the neighborhood but each property can easily pull in a extra $100-$150 per month.
My question to BiggerPockets is how should I determine my purchase price? Should I do a cash offer, seller finace offer, or both offers?
There is a lot of info you are not providing
I first of all I would want vacant possession of the 3bed unit and have that property manager out.. She is getting free rent of potentially $600 a month for a $975 monthly rent roll.. That's dumb... or have them sign a new lease at closing at a discounted rate and continue to manage..
You didn't even give any indication of purchase price. How would anyone on BP make a suggestion other than looking at comps or ask a realtor?
Personally for my first investment I would use a professional rather than asking BP.
Cash you will likely get a lower purchase price as seller finance you usually have to pay near full asking... But my strategy would be going on a lower offer with seller finance and if there is any push back then try cash with same or lower amount.. also depends on terms of loan..
The sellers are looking to get $55k for all 4 properties.