Mulit-Family NOT for Sale but I want it!
Hi BP!
Two years ago I purchased a duplex (2-family flat) for rental purposes that is connected via a wall to a 4-unit that has been vacant that past 2 years, and apparently many more years prior to me acquiring my property. I know the property needs some work but fortunately the units are set up pretty much like mine which I've renovated so I have a good idea how much it would cost. The property is owned by a trust, an older couple is managing it, and is currently NOT for sale. I don't know the owners very well but did have to speak to them briefly over the phone on a few occasions while completing my renovation process.
Here are some of my estimations and hopes in acquiring the property:
-I'm thinking to do HML to Cash-out Re-Fi finance (I've already talked to a loan officer and she is supportive of this approach) to acquire and renovate the space to then rent out
-There was a recent sale of a 4-unit a block away for $225,000 (which looked to need a little bit of work itself). I'm conservatively estimating renovation to be about $70K based on what I spent on my project (all major systems replaced + cosmetics + contingency).
-I want to offer $70-75K (or less if I can) for the property but I don't want to offend them either.
-Using the Rental Prop Calc, I would be looking at about looking at about $900 in cash flow after mortgage, expenses, reserves, etc.
I'd like some feedback on how to approach the owners and also if this deal is makes sense based on the little I've shared. Should I send a letter, give them a call, or go to them in person? I've fairly young and am told that can be used as an advantage when speaking with an older owner. Thanks in advance for your feedback!