Apartment Investing Questions

[Shawn Dandridge]

I am looking at an apartment building in Memphis. 20 units. 4 1 bed, 16 2 beds. It's a Class C-/D neighborhood. Low income. I am very familiar with the neighborhood and complex as I grew up around the corner. The crime in the general areas surrounding the apartments is very little. I actually feel safe walking around at night. If you look by the zip code you get a different story. The current owner owes about 30k in back taxes and is several years behind (4+). Since the building is being listed for sale, from what I can see she is making small payments. 

The area is currently going through a redevelopment phase but its slow and property values still quite low. Not enough redevelopment to justify such a high asking price on a building that has severe deferred maintenance. The building would need an entire gut and rehab. At the price she has it listed, it's overpriced by at least 70-80k at best. What could I do from a negotiation perspective to get them to "see the light"?

[Stephen Akindona]

I have never bought an apartment complex but I have negotiated several deals with sellers and I think it's important to build a rapport with the seller. Only when you feel a connection do you try to help them see the light. They are investors so use the numbers to help them realize value. (Cap rates, ROI, coc) Find out why they are selling and try to be creative in meeting there needs.

Hope that helps! Also let us know what happens!