Everett 9-Unit (please review)

[Lane Kawaoka]

First time asking for deal analysis. The kicker is that they are offering seller financing. What should I ask for in terms of seller financing, what is a typical agreement? Would like to put down 25% and get seller financing for rest.

4220 Colby Avenue Everett, WA 98203 (20 miles north of Seattle)

[Albert Bui]

If I were you I would figure out what the commercial banks lending guidelines are and pre plan my exit strategies on how I could refinance out or sell or option the property out just so you'll know the strategies going in.

Most commercial lenders want a min loan amount of 500k or higher since it takes them the same about of due dilligence work to originate a 500k note as a 2,000,000 note in terms of human hours and work.

There are some local lenders or niche lenders who might be able to entertain a loan on 540 value 9 unit property perhaps at a lower LTV.

To address your question about the terms of seller financing, I would first determine your desired rate of return on your capital of $135,000 down payment.

Since we know the NOI is currently 33,424 the difference between this and your annual mortgage payments will be your annual cash flow so first determine what that might be and then you'll have a position to negotiate from.

I would then add a margin of error to my desired number because during negotiations you might have to lose some ground to come to an agreement.

Hope that helps.