How to fiance small apartment building deals?

Question

I am looking to buy a small apartment building for 185k and I have 20k in cash. What are the best option to finance this deal??

Pete Schmidt · Answer

I would suggest owner finance. I am going to start asking on all the ones I offer on. They may say no, but if you go in and look like you know what you are doing the they may take it.

Pete Schmidt · Answer

it really depends on the property and their situation. Some are just tired of dealing with tenants and don’t need all the money right away. So for them to finance it for 5 years is not that big of a deal since not only do they get to sell the property and not deal with it, but make a lot more interest than the bank would have given them. Plus it will be a nice passive income and capital gains won’t kill them like the big lump sum would. Interest rate can be what ever you agree on. I offered 5% on my last one and he was good with it Owner finance Is usually more appealing for owners who have places on the market for a long time or really run down.

However if they need the cash to relocate or cover some other big debt now, they won’t be interested in financing it for you usually. So find out what they want and need and work from there.

Mahan Shahverdi · Answer

@Pete Schmidt Can I refinance the property after a year or 2 ?

Thank you for your helpful info.

Mahan Shahverdi · Answer

@Pete Schmidt @Jordan Moorhead Thank you for sharing your knowledge and experience

Mahan Shahverdi · Answer

@Jordan Moorhead Why would a seller do owner financing? How should I run the numbers for them?/

Mahan Shahverdi · Answer

@Pete Schmidt How do you convince them that owner financing is good option for them? How about interest rate?

How to fiance small apartment building deals?

How to fiance small apartment building deals?

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