Help me structure creative-finance Offer Structure for 6-plex
All:
I'd like your help in structuring a creative solution to buy a 6-plex that is physically in good shape, though financially it's a mess.
Here are the details:
- "Ask" price is $299K, though Seller's Agent has suggested to me that deal may be attainable at $250K.
- Will be a Short Sale.
- Owner is in default on his loan to local bank: balance owed as of July 2014 = $254K. Additionally, there are ~$14K additional in interest since July, and another $14K in late fees. TOTAL DUE TO BANK would be $282K.
- Mortgage with local bank expired in July. Bank refused to extend/roll over. It had been a 7 year note at 6.25%.
- During Summer 2014, local bank accepted an offer where they'd net $210K after all commissions, fees, etc. That deal fell through.
- Total delinquent taxes to County is ~$21,000.
- Annual Revenue Generated is ~ $56K. At $250K purchase, that would be close to "2% rule".
- Building is in good physical shape. I ave already done a walkthrough.
- Market brochure advertises NOI of $42K, though that is high. I'm assuming net NOI of $27K, after reserves vacancies, property mgr, etc.
ISSUE: How do you structure a deal that would satisfy the Short-Selling Bank, the County (backtaxes), and the Owner, while still being financially viable for Buyer? (Sidebar: does the owner matter - he would not get anything regardless.)
Would very much appreciate everyone's input here. I want to be courageous, but not rash, in pursuing this one.