How to structure purchase of property portfolio

8 Replies

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.  !

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.  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.

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