Buying 12 single family homes

9 Replies

I'm looking to buy 12 single family homes from a friend of the family. Looking for suggestions on how to finance this deal.I cant get a bank loan on my own, but I have 80k to put down myself and a guy willing to co-sign and cover the remainder of the down payment. If I went that rout, what would I offer this gentleman in return for co-signing and what percentage should I give him on top of whatever he puts in? If I don't go this rout what are my other options? Any and all comments are much appreciated thank you and God bless!

@Christian Ray Smith there is a ton of information missing here to give you a solid answer. What shape are they in? What are you paying? How much is he putting in?
@Christian Ray Smith there is a ton of information missing here to give you a solid answer. What shape are they in? What are you paying? How much is he putting in?

I have not got the exacts on anything yet it just got brought up in a discussion we were having that he was interested in selling his properties. My dad has done work on most and they are all great homes in good locations with the exception of 2 that are in lower end neighborhoods. I would estimate they're worth to be around 1.5m and I'm looking to pay 1-1.2m at 20% down would be 200-240k. I could possible come up with that much on the low end 150k which would put my friend in at 50k with co-sign.

If he's serious about selling and the numbers are right what are my best choices for financing? He's not interested in seller financing, so what's the best rout to take. A portfolio loan, conventional loan or commercial loan? I was thinking of a 13 month contract with the co-signer for time to refinance and reimburse any money with a percent interest added. Is this a good idea or are there better options out there. thanks for your reply @Kevin Christensen

@Christian Ray Smith

If the properties are all stabilized with little to no deferred maintenance, a no income verification portfolio (or blanket) loan will do the trick for you with 12 properties at that value, but you'll have to come to the table with more than just 20%.  If you can get conventional financing, that would be ideal because the rate/terms would be the most favorable, but you would do each property separately (which is a better way to go anyway) and you would have to qualify full doc.  

Stephanie

What percentage  would I have to come up with? If I can't get the money on my own what are my options to offer any investors that I may find? 

Originally posted by @Christian Ray Smith :

What percentage  would I have to come up with? If I can't get the money on my own what are my options to offer any investors that I may find? 

 Sorry for the delayed response.  When asking questions of a specific person, go to the ellipsis in the top right corner of the thread and choose "Quote".  That's what I did here.  It will give you the part of the thread you're responding to and give a notification to the person you're asking the question of that you are replying.  Also you could just type in @and their name and their name will populate to the left. Just click on the name and it will notify them as well.

Most places want the down payment funds to season at least 60 days (portfolio lenders) meaning the cash to close would have to be in your account for more than 60 days or two statement cycles.

@Christian Ray Smith There are a thousand variables in this situation that make that an impossible question to answer. For instance, you need to show W2 income on your tax returns for the last two years that is substantial enough to make a $10k+ monthly payment and still keep your DTI at a reasonable level if you want to go traditional financing. You need a portfolio loan or a non-ratio loan, where the rent of the property is used to qualify you for the loan.

Thank you guys for the replies and your input on things. After I talk with the seller, do a  walk-through and evaluation of the houses, and crunch some numbers I will get back with yal @Stephanie P. and @Jason Hirko much appreciation! 

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