Seller financed fourplex deal
Hi All,
I've been in discussion with the owner of the property next door to mine for a couple years, just letting him know I'm interested in buying when he's ready to sell. He's around 70 and willing to seller finance.
He finally gave me some numbers to start with last week. I think all of them are way in his court, but I know he's negotiable.
Four 2/1 units, renting for $600 right now. I own 2/1 units next door renting for $825. His rents are under market and his building is super ugly. (So are a couple of his tenants.)
He gave me these numbers:
$300,000
3 year balloon at 6% 30 yr amortization
$30,000 down
Comps in the area are $190-$289 for the last year.
I would like at least 5 year balloon at 5% 30 yr
I'm still working out down payment, but also want to keep some aside to make this ugly thing prettier (paint and some other stuff ~ $3000 plus sweat).
What do you think? Where would you go with this property?
Most Popular Reply
Start with the comps. You listed a $100k range in comps - you absolutely need to fine tune that. See exactly what fourplexes have sold for in the immediate area. If you're not sure, consider getting it appraised. If you're going to refinance in 3-5 years, you need to make sure you're not overpaying now, or else you're going to have to come to the closing table with a lot of cash to refinance.
- Tom