Owner out of the country; wants to sell duplex - How do I buy it?
I know a property owner who lives outside the US and wants to unload his duplex and I'm trying to find a way to buy it. I'm wondering if seller financing might be my best bet but I'm really new at this so I could be way off. I've been reading as much as I can on here to see how I can do it but I think there are a lot of variables that I'm probably not thinking of because I don't know what I don't know. So hopefully the Bigger Pockets community could shed some light on this.
So here is how I know the owner and all the details I know of regarding his situation that may be helpful.
-My wife and I rented one of the units in his duplex for 7 years.
-He wasn't a big time investor (i.e. owned a large portfolio of assets). He bought the duplex with the intentions that when his sons got old enough to attend the local university they could live in one of the units and have their own space and still be close to home. He also rented his old house that was around the corner from the duplex.
-About 4 years into our stay, his wife got a job offer in her native country and they all moved. He then enlisted a property management company to oversee the property.
-Fast forward 3 years and we are looking at buying a property ourselves. We would have loved to buy his duplex but for a number of reasons didn't think we could (I thought it would have been out of our price range) but we mostly didn't want to tell the owner that we were looking to move as we were paying well below market for the place and didn't want to rock the boat. In hindsight, it probably wouldn't have mattered if we told him (because he ended being really cool/happy about us finding a place) but we just didn't know how he or the property managers would respond.
-A few weeks into our property search we put an offer on a property and it got accepted. We talk to the owner about what we can do to break our lease. We agreed to terms. He was very gracious and congratulated us on buying a home. During that conversation I tell him that the home we bought was a duplex and that we were wanting to buy more properties in the future. So I casually ask if he would consider selling his duplex. He says why didn't you ask me sooner? He tells me that he's actually been wanting to sell it because he doesn't want to file taxes in two countries ever year and it's a pain. Plus his kids aren't coming back here for school now so the reason he bought the property isn't a factor anymore. I proceed to feel dumb.
-He continues to say that he wouldn't ask market value for it and since we both know each other and we've lived there for a long time and know the property we could do it without agents and save some money. So here I am, with an accepted offer on one place and this other potentially appealing offer. The short of it is, he was in the middle of another move across his current country and couldn't really give me a number he's be willing to sell it for and I had an accepted offer on my own property so that's where it ended. I did ask him to let me know when he was ready to sell it because I'd be interested.
I'm not sure if all these details were necessary so sorry if this was long. I just wanted to paint as much of the picture as I could. So here are the main factors I see from the owners perspective to take into consideration.
-Owner is out of the country and doesn't want to file taxes in two countries every year
-Original motivation for owning the property is gone
-Wants to leave real estate agents out of the equation
Some of you may want to know if the numbers make sense. If not, then don't bother with this exercise. That's the other tricky part about this. I don't know what the owner has in mind when he says he'll sell below market value and I'd like to have my finances in order before I approach him again. I've checked two different sources to identify approximate value on his place (zillow and relator.com). I know their numbers should be taken with a grain of salt and it's especially true in this case as there is nearly a 200K difference between them! However, the thing that makes it worth it to at least pursue is the potential to have instant equity if he really does sell below market value and my knowledge of the property. We've had hardly any issue there during the time we lived there so I don't believe there will be much if any deferred maintenance. I believe based off comps in the area that I could still get more rents out of it without being unreasonable. As far as my contribution to a potential deal is concerned, I have at least 10K potentially a few thousand more in cash. I'm also currently trying to see if I could pull some equity out of my current duplex. The short of that is it was listed as a single family with rents well below market. We've since raised rent and want to have it appraised as a multifamily. The potential there is about 20K.
So that's what I know. I'd love to hear your thoughts on how I can best explore this further.