How to structure owner financed multi unit deal

[Ron B.]

I've found a multi unit apartment building with 100% owner financing. It's $3.5m the current gross income is $389k with net profit of $189k. The broker said the owner wants at least 5% interest. 

How could I do a deal and still have an annual income of at least $100k?

[Michael Le]

The numbers don't work as you've listed them. You want annual cash flow of at least $100k but your NOI is only $189k. For debt service to only be $89k you have to buy this property at $1.4M. At the purchase price you're looking at, the NOI doesn't even cover the debt service which would be $225k.

Unless there is significant value add, it's about $1M overpriced.