Updated about 1 month ago on . Most recent reply
Creative financing on 29 units
Hey BP, long time listener and first time poster. I exited my previous partnership a few years ago in which I had 20 units. Fast forward a few years and I am looking to get back into long term rental properties again with a focus on multi family properties in my home area. I’ve been analyzing the market because things have obviously been changing like crazy in my few year hiatus and in doing so I stumbled upon an of market deal for 29 units (a mix of duplex, triplex, quadplex) all side by side on the same street. The seller is selling them well below market value and I am trying to tackle this before he takes it to market.
The issue is that I can only afford 5 percent down on this. Normally I would just keep looking until I found something more in my budget that I can close on quickly but I feel that this deal is too good to roll over on. The owner is considering my offer of purchasing 7 out of the 29 units conventionally while he carry’s the note on the remaining for 15 years but with a 5 year balloon payment. My local bank would refinance me at that point since the principal paid would be past the 20/80 threshold.
if the seller rejects this, are there any other creative solutions to bag this deal? Thank you in advance!
Most Popular Reply
Cody, that’s a rare opportunity—29 units together is huge for a single street. Your current approach with partial conventional purchase and seller financing for the rest is solid and often how creative deals like this get done. Another option to explore could be a joint venture with a private investor or group to increase your down payment capacity while still keeping control. You might also look at bridge financing or short-term hard money for a portion, then refinance once you hit conventional thresholds. The key is structuring it so the seller feels secure, the deal cash flows, and you don’t over-leverage yourself early.