Creative offers for underperforming multifamily

2 Replies

I'm sending a LOI out next week for an underperforming 36 unit multifamily in the SE. Seller has it significantly overpriced, but the listing agent has given some indication that he understands the property's issues and may be willing to come close to my strike price (she doesn't know that number.). Seller has many more properties and I'm told he's selling these to free up capital.

I'm going to put out two numbers, a low price that is justifiable at an 11cap and a higher one that includes seller financing and repair credits. Any other creative offer suggestions that may make this win/win? Thanks!

Are you saying that comps ARE 11cap? If so, why would you consider offering higher?

The general consensus around BP is to NOT Offer based on potential return - but on current actual.

Being "significantly overpriced" suggests to me that the Seller is NOT highly motivated.

It will be quite the trick to get this one at a desired "significantly UNDERpriced" Offer! My 2c...

Brent,

I am a little confused regarding your question. I have a lot of experience in creatively offering and or negotiating with regards to Multi Fam and CRE investments on both sides of the equation (as buyer representative & or seller) and don't understand the need to present 2 offers upfront.

I would love to understand more and give you my insight if you would like?

LMK, always happy to talk with like minded individuals.

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