offering 225k, need 25k back for repairs. How ? I'm missing a piece to this p

[Mike Campbell]

Here’s the scenario, been contacted by an owner of a 7 unit building with a small rental house on same lot, basically 8-unit building.

Asked if I’d be interested in buying, well of course, duh. I own other rental buildings.

Reason he’s selling, getting older, doesn’t want to deal with it, wants 1031 exchange.

Inspected the property, 25k in deferred maintenance at the least, windows, foundation, laundry room needing cleaned up/updated, exterior of building needs painted, apartments updated as people move out.

Lower C class for sure, but can be built back up, I’m good at those things.

Made offer based on current rent, differed maintenances, cost of money, insurance all expenses are up, lower end of the economic scale renters, cost of living way up, so a downward pressure on their money, not much room for rent increases.

If building had differed maintenance repairs done as described above, I believe to building is worth 225k, wont work at the 8% I was quoted by the bank a couple a months ago.

Offered 200k explaining the deferred issues to owner, a big fat NO, was the reply.

LIKE OTHER SELLERS IN TODAYS MARKET MOST ARE STILL STUCK ON NUMBERS FROM A FEW YRS AGO.

Read books by Steve Berges and Brandon Turner, RE; creative financing strategies.

Since the property is owned out right and he’s looking to defer capital gains taxs would make sense to have him carry the loan until interest rates are more favorable.

The offer would be 225k he carries the loan at 5%, I’ll refi when interest rates are more favorable, this gives him time to defer capital gains, plus make some monies on the loan, I’ll take over all responsibilities.

But what I need is 25k back for repairs and operational capital, why would he give me the cash back at closing.

I know I’m missing something, how does one make that happen?

[Nicholas L.]

@Mike Campbell

if he will do seller finance I don't see 200 vs 225 vs even 250 as a big deal

i wouldn't count on rates going down though - you should run the numbers as if you'll never be able to refi below the rate you get

maybe you will, maybe you won't