Off Market 11 Building Property -First Commercial
I started my REI path looking into multi family 2-4plex homes. I've made a few offers but the right deal hasn't popped up yet. I recently sold my rental property of 7 years and have $70k capital coming out. Closing for this property is next week and I've lined up a 1031 intermediary.
I learned from my cousin that his step father was off-loading his 54 residential properties and wants to retire over the next 2-3 years. I decided to call him up to bend his ear and ask for tips. He told me the residential market is great but the best move he made was buying a 6 acre commercial property. Over the years he's built up the property which now has 11 separate buildings. Each building is catered toward more contractor based companies and current tenants include a roofing company, church supplies, lighting wholesale, contacting/maintenance and a few more. The owner of this property is occupying one of the 11 buildings and he uses another one of the buildings (new in 2019 70X30) to hold his junk. He is not paying himself rents on either of these buildings. Long story short he told me if I could swing it, this property is the best investment he's ever made. Turnover is extremely low and all leases are NNN.
Current rents on the occupied 8-buildings is $23,500. Once the property is sold the 2 other buildings will free up. The finished building is actually split in half with individual 240v electric in each unit. Rents on each unit could be $2,500 per side. The 11th building is not finished inside and could be built to suite. Rough rents are $3k on this building once finished. This would bring rents up to $31,500.
He wants $1,250,000 for the property. I’ve got $70k in my 1031 and another $30k to put down. I’ve asked the seller if he would consider seller financing but have not heard back. I spoke to a commercial banker today and he told me I would need 20% down to obtain a loan through them.
Question for the BP community. What kind of creative ways can I present this to the seller? I’ve got $100k at my disposal. The seller is my cousins Dad and I have excellent rapport with him. He wants me to have this property but I want to present a fair proposal.
Thank you,