Option to Purchase 100 Unit Multifamily Building
Hello. I came across the owner of a 96 Unit apartment complex that would like to sell his property. He owns the property free and clear. I'd like to put the property under contract for 90 days and include his willingness to seller finance 15% of the down payment. Which form do I email him to put a property of this size under contract?
Most Popular Reply
One thing I'll add is that to whomever you wholesale this deal, your Buyer will most likely be bringing somewhere between 10-15% down. Many apartment lenders want no more than 70% LTV. You might luck out and get 75%. How goes progress on your Buyer's list? I know 90 days sounds like forever, but when you talk about needing someone or a group of investors with $1 - $2 million sitting around ready to go that could take awhile if you haven't already built credibility.
Plus, what's your plan if you do find someone and they get in collaboration with the Seller to just wait you out until your deal expires? You're not a licensed agent with a listing contract, so anyone who you introduce this deal to can just wait for your contract with the Seller to expire and then grab it. You would be due no commission in that case and they could negotiate with the Seller on the side.
The thought here is the Buyer can be patient. You cannot. Therefore, you need not just one but at least TWO buyers who are ready, willing, and able to tackle a deal of this size. That way if one tries to short cut you, the other can jump in and get the deal.
Btw, if you don't know how to put a deal like this under contract, I think you may be putting the cart in front of a horse. Technically, you can do it with a single sheet of paper. "Seller X agrees to sell property at 123 Anywhere Ave Units A - ZZ for $X,XXX,XXX on or before (today) + 90 days to Buyer Ryan James or Assigns." Sign and date. That's really all it takes from a bare minimum standpoint. However, there are a lot of this's 'n that's such as assignment of contract, due diligence, permission to show, division of closing costs, financing contingencies (if any), earnest money, etc. that also needs to be hashed out. I recommend you get with an attorney who specializes in large real estate transactions and pay a few hundred bucks to have him/her draft you a form. He/She will have the experience of many deals to steer you thru the 1,000 "Oh dang, I didn't think about that" scenarios that come up and torpedo these deals.
This isn't the place to go cheap and try to save a few bucks on an online forum, where the quality of the advice varies depending on who gives it, and you don't really know if any of us know what we're talking about other than from our handsome pictures and thumbs up scores. If you want to play in the big leagues and not lose out, it's time to spend some money!
P.S. I'm curious, how much Earnest Money is this Seller wanting? My guess is he won't settle for the typical wholesaler "fee" of $25 - $100 that the gurus tell you to use.