I'm working with a retiring landlord who wants to sell of his portfolio of properties. He's skittish about seller financing, but would consider it with 40-50% down. My plan is to keep a few that would make good flips, hold a couple rentals myself and sell off the rest. Ideally I don't want to use all cash, but I also don't want to over-complicate the transaction. What are my options for structuring the purchase?
If I use a loan would I be able to sell the properties off individually later? If I wholesale the ones I don't want should I try to get my buyers to close simultaneously? How would you do it?
keywords: Indianapolis, portfolio lender, blanket loan
Hopefully someone will correct me if I'm wrong, but from my understanding if you get one blanket loan on a bunch of properties you wouldn't be able to sell them off individually. Or at least it could really complicate the sales. I haven't done this and I'm not in a position to do this soon, but recently met a portfolio lender and that's what I took away from it.
I'm not much help but just wanted to throw out there what I interpreted. Hopefully someone can be of more help. Good luck with the deal @Micki M. !
@Micki M. what is the total value of the portfolio ?
With a blanket loan, you'd establish a separate "release" amount for each individual property, up front.
I am currently working with a local bank in my area where they are issuing me a commercial line of credit on a portfolio of houses that I have. They are willing to release properties in the portfolio which would affect the amount of the line that I can draw upon. These sort of loans/lines are out there but I am mainly seeing smaller local banks that are willing to do them. Hope this helps.
@Don Harris The 9 properties I'm most interested in have a purchase price of about $400k, but half of that are properties I want to flip so I'm wondering if it would be smarter to bring in cash for those and finance the rest. If I bought the whole portfolio it would be about $600k.
@Micki M. thanks Micki
@Micki M. will the seller let you put them "under contract" for an extended period of time [like 60-90 days]?
If so you could do that & market them. You could then sell off the ones you don't want via an assignment [to someone like me]!
@Shawn Holsapple that might work, I wasn't sure how much that would complicate closing since part of our offer is that we'll buy them all to make it an easy transaction. I'll give you a call so we can chat about what you might be interested in.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!