Creative financing tips on 6-house package?

[Mariah Jeffery]

I think I am close to an agreement to purchase six properties from the same seller. They are approximately 30% below market value.

My husband and I would each purchase three properties in our own names, to minimize the number of mortgages we have. We each already have one investment property with a mortgage, and our primary residence mortgage is in his name only. I have owned my investment property for 2.5 years, and we are closing on his triplex this week. We are planning to buy one each per month for the next three months. I am concerned that lenders will not want to lend to us on so many investment properties so quickly, even though we have ~780 FICOs, plenty of W2 income, and low DTI. The others more than pay for themselves with $100+ cashflow per property, so our debt to income ratio should improve. Should I be concerned? The seller wants earnest money on all six properties with no financing contingency, since the main reason he is discounting them so much is because we are buying six (we still have inspection contingency).

The seller is not willing to owner carry because he’s 87 and will probably die in a few months, so he wants his money now. I tried and tried, but he won’t budge. I suppose if he’s going to give me my price, I’ll give him his terms, especially since we have the cash for the 25% down payments.

We may try to buy one of them (currently vacant) as a second home.

Even though it would actually increase our cash needed for a down payment, I’m considering trying to buy one or two of these properties in cash, if the seller will consider allocating something very small (around $20K) to one or more properties. The market value for these properties is between $70K-$95K but our package price will be just over $55K per property. I’m not sure if the seller will balk at allocating $20K to a $70K property because I haven’t asked him yet.

Are there any other creative strategies I can try to minimize the down payments and/or reduce the number of mortgages? Any other suggestions would be appreciated.

By the way, the package includes five SFR’s and one duplex. Four of them are right in a row on the same street.

Thanks,
MJ