Sober living investment

[Garrett Cuppels]

I am considering purchasing a sober living house in Georgetown, DE. It has 5 bedrooms and earns 5K per month, but the owner is asking for 360 K.  It will be managed by a behavioral health company that guarantees a house manager, so I am shielded from any issues with the tenets. Furthermore, they will pay the monthly rent to my company regardless of occupancy, so the 5K/month is assured. The seller wants 20% down on a seller-financed deal.  But I wonder if I can do better using a mortgage broker.  Any advice is appreciated. 

[Charlie Cameron]

Quote from @Garrett Cuppels:

I am considering purchasing a sober living house in Georgetown, DE. It has 5 bedrooms and earns 5K per month, but the owner is asking for 360 K.  It will be managed by a behavioral health company that guarantees a house manager, so I am shielded from any issues with the tenets. Furthermore, they will pay the monthly rent to my company regardless of occupancy, so the 5K/month is assured. The seller wants 20% down on a seller-financed deal.  But I wonder if I can do better using a mortgage broker.  Any advice is appreciated. 

You can almost certainly get a better deal with seller financing than bank financing right now, I'd try that first. Most banks will want 25%+ down. I'd work that with them to get a lower than market interest rate as well so that you can cash flow higher.

Also, sober living is more risky of a business. I'd ensure that you can at least break even or have a different exit plan if that 5K goes away.