Seller financing multifamily

[Tevell Williams]

Hello all, I am looking for some sound advice on a possible investment opportunity. I found three owners, of a 20 unit multiuse/multifamily property that they are trying to sell. Each owner owns about 33 1/2%.. The price currently is at 469k. They are highly motivated and will consider seller financing.

This is the thing, there are 16 units on top floor all one bedroom studio apt. 4 are about 600 sq. Ft. The other 12 are about 500 sq. Ft. Also, 4 commercial spaces on 1st floor sizing at about 10,000 square ft. Total. The town has condemned the apartments due to no sprinkler system, so there are currently no tenants. Two of the 4 commercial spaces are leased at the moment.

I currently own five SF rental properties in the same town, I think it would be a great addition to my portfolio, however there are alot of barriers as I've pointed out. But considering the sellers are willing to entertain seller financing I may be able to structure a deal. However, I don't neccesarily know how to get creative with the numbers to make this work for both sides. Any advice will help!

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[Torend Ebner]

@Tevell, I agree with @AndrewCarlson. Everything is worth something - and that's why you asked for help, to find out what it's worth.

Before considering structuring the deal, start with trying to get some costs around the new sprinkler system required. I have a feeling you might be in the $40-50k, depending on the application. See if you can find someone who has experience in dealing with these condemned situations. Cheapest isn't the best.

Get the bid, pad it by 20%, and deduct that from their price, along with all other necessary rehab work the needs to be done.

The longer the property sits on the market, the better it is for you at the negotiating table. And while everyone is staying away from it, you could have a great opportunity on your hands. BUT you have to negotiate it appropriately once you know all the facts and figures.

Good luck and keep us updated!