Updated over 5 years ago on . Most recent reply
Buying 2 Apartment Buildings at Once
This is all very tentative, but I may have the opportunity to buy 2 multi family properties in a solid B, borderline A class, side of town.
One is a 7 unit which matches the area. The other is a 6 unit which I would call a C property in a B area, so huge potential there.
What I have to work with is $30-40k for a down payment. I think it's possible I could get the 7 unit nicer property for close to 200k. A 20% down payment would take all my cash without much left for closing costs, etc.
I think I could get the 6 unit for about $125k. I could put $40-50k in renovations and it would probably be valued close to $250k. We have some local lenders that work really well with commercial real estate. I could get an interest only construction loan and only pay a down payment on the purchase price (20% of $125k --> 25k).
As far as CoC return it seems the 6 unit would be a better bet, but I would like to find some creative way of purchasing both properties. A thought I had was to purchase the 6 unit using a bank financed construction loan and try to purchase the 7 unit using seller financing. Once the 6 unit is renovated, I could then refinance and then subsequently refinance the 7 unit from seller financing to bank financing.
Thoughts?