multi unit rehab w/owner finance

2 Replies

looking at an 8 unit(2/1) and a duplex on same property with room and ability to build additional apartments. 

Owner willing to owner finance for a year. Currently needs a lot of work. Class c at best. only 4 units occupied. My plan is to bring up to class b. I want to offer 325-350k(What he paid in 2004) he just wants out. I would pay all closing and  paying him what he is bringing in on rent right now. About $2600/month, so he doesn't lose any cash flow. Then pay him full price in a year after refi with construction loan. Property can rent for $1000/unit when rehabbed. It needs about $200,000 in rehab pretty safe to say. Maybe more. Town wants me to do it and bring in better tenants. Still doing due diligence on the building of new units. I can bring a couple units up to par pretty quick just to add some cash flow. I don't want to fill all the units yet because I want to be pretty close to empty when rehabbing, so I can bring in totally new upgraded tenants. It has a pretty bad reputation right now.  What do you think? 

Based on pro forma rent roll, it should be somewhere in the ballpark of 800. We are rural so Not many comparables. Bank was talking 6.6cap average. 

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