I recently have been reaching out to motivated sellers through direct mail and several other techniques commonly used by other investors. I was contacted by someone and this is the possible deal he is offering-
There are 2 side by side 6 family properties. So 12 units all together. These units he claims have been Condo converted. He says he owns 7 of the 12 condos. He wants to offload these 7 and suggested a seller financed based deal.
1. What are the type of questions I need to ask ?
2. What are some things I should consider or possible risk in a transaction such as this
3. How do you make any money if all the “condos” are occupied??
When one investor owns more than 10% of all units, the complex is non-warrantable. This isn't necessarily a bad thing, just know you won't be able to sell these off individually to anyone who needs a loan. You can still seller-finance them, but FHA won't lend on these units until the complex is warrantable.
If he's the one who did the condo conversion, you definitely want to see the documentation on that.
He owns 7 of 12, that means at least 6 and probably all 7 are rented out, so you would just take over as the landlord.
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