Need some advice on a 6-unit bldg
Spoke to a woman who has a 6-unit bldg. in a class C+ neighborhood. 5 units are occupied, getting about $600 per unit. That is probably $100-$200 under the going rate in that area. She says that she wants out of the property. She is an absentee owner. She has a mortgage of about $160,000 and says that she would be willing to sell it for what she owes.
I don't have a lot of money but I was thinking about offering her about 2 or 3 thousand dollars, which would be applied to the $160,000 and having her carry a note for the rest. I would refinance it in about 5 years and pay her the balance. She says that she attempted to refinance the bldg. but her bank told her no. I have yet to ask for an income and expense statement. The average cap rate is about 6.45 percent for class C properties.
The Gross operating income is $3000. I have estimated the Operating expenses to be $1206.00.
Any advice?
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@Wave Taylor are you going to owner occupy one of the units? Try to find out what the bank wanted that she could not do on the refinance, really get down there and check out the area. The issue with subject to the existing mortgage is that she could take your money and not pay the mortgage and you would lose the property. See if the loan is assumable as well.