I know they were trying to sell this property over 10 years ago (my son is 13 now). I think a MLO is the way to go but I'm not sure. The area is a A-B neighborhood, based on a 10 cap the price seems reasonable (comes out to 7.6 cap as is), the rents are a little low for 2 and 3 bedrooms but the kitchens and baths need updating so there is room for forced appreciation. My problem is.... I have no money.
It seems from reading and my knowledge of intangible assets the benefits are many for them, such as depreciation offset, saving on commissions, stretching out the capital gain, earning a better return than the bank, a degree of control, etc. But I still have no money?
How do I make this even viable? Oh and I don't know a soul who has that kind of money, YET. HELP!!!
I have read this 3 times now and still have no idea what you talking about?
In order to make a profit, you need to bring something to the table. Whether it be money, experience, management, or the deal itself.
If you can get a good enough deal on it, and convince someone with money that you have enough experience to manage a property like that, then it’s that easy.
If not, perhaps you could wholesale it and take a fee for matching the seller with the buyer.
There's not much that can be done with $0 but If you know the sellers personally I would start with trying to get them to do seller financing. Start with 100% financing with all cash flow going straight back to them until you reach 10% down or something like that. If the property is good enough they might want to have a part in it still. This is a VERY tough sell though.
@John Horner, sorry, if I was rambling. But what I'm trying to do is figure the best approach to buy a property like this, outline the benefits to the seller and to find money from the seller(MLO) or private lender. Bottom line is I'm trying to figure out a viable way to buy this property.
@GarrettH I know I can bring management and strategy to the table, but is that enough in these situations. The owner is old school and will want his payday all at once, but I assume after trying to sell over ten years ago and their advanced age, there has got to be so pain somewhere in there.
So, it's a multi fam, yes? It's not on the market, correct? And you would like to buy it with 100% seller financing? What is the unit mix/number of units? Do you have any experience?
When I purchased my first bldg, long story but the owner had sold it before 3 times to unqualified, inexperienced buyers and and took it back each time, pocketing their payments...nice gig for him.
You're in the right place to find interested and experienced partners. Work it! And the best of luck to you.
Hi @Eva Salas, it is a 30 unit plus property that is on the market. Yes, I would like to buy with no money down. About a twenty units are 2 bed 1bath and the rest are 3 bed 1 bath. I only have experience with a triplex as far as real estate. But I have experience with large projects and responsibility from managing large stock portfolios, estate planning and managing over 60 advisors, $85mm in assets and over 3000 clients at a time. My experience there should translate to real estate even though not perfectly of course.
Hello andre is the property in Chicago. I may know local investors that may be able to assist. Feel free to connect with me.
@Andre Davis When you say the property is on the market, what do you mean? Is it listed on the MLS, LoopNet,... or is the owner trying to sell it privately?
@CrystalSmith, it's on both.
Well, thank you all for your insight. What I've decided to do is approach them and depending on if they need cash right away or can wait, I'll present either a seller finance of 20% and finance the rest or a MLO. Then I'll upgrade the units to force the appreciation and refinance. So..... any thoughts would be appreciated.
How are you going to upgrade the units if you have no money?
What are the numbers on this deal? Do they make sense? How do you know it's even a good deal? In today's market, most good deals don't sit unsold for several months.
@Sean S., Well I used the analysis tools here on the site. There would be cash flow that I could use to upgrade the property and my wife has excellent credit, so the building would be titled in her name. When an emergency comes up, there would be the money for cap ex, repairs and vacancies to fund a loan if it was beyond the monthly money set asides for those instances. She is also a licensed real estate agent so, on closing we would use her commissions as our initial reserves.
What would give me a chance to make this a great deal is that we have a relationship with the owners.
@Sean S and we also have our own home project that we are working on and plan to refinance shortly where we should create about $60k of forced equity. Also, we have about $13k in cash.
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