Hello BP Family,
I have a question in regards to how to go about buying my first investment property. This 3 family property is located in Guttenberg, New Jersey (which is in Hudson County). I personally know the seller. Currently the seller owner/occupies the 3rd floor and rents the 2nd floor to an elderly Aunt, and first floor to her nephew and his wife. She had contacted me to list the property potentially about a year from now, being that I am a real estate agent, however I am interested in buying it.
I will not be owner occupying it. I went to look at the property and it is in great condition and each unit is renovated nicely. Her husband discussed that if he could get 350-400k for it he would be happy. Being that I want to buy it direct I will be saving him the broker fee and hassle of listing a home. The current market there would bear probably 420-440k for the property. I obviously want to get it for as cheap as possible.
I do have funds for a down payment, however I do not want to tie up all of my money as I want to be able to buy more in the near future.
My question is what are some creative ways to purchase this property without coming out of pocket with a lot of funds, and making it appealing to the seller? Additionally I have a fairly wealthy Uncle who has cash...could this be an option of some sort?
I am currently waiting on the income/expense report? What else should I request for a proper analysis?
If you have a wealthy uncle who would be willing to invest with you, why not partner up with him on your first property to dip your feet into the water while minimizing your risk and to retain as much of your money as possible for future investments. That is what I would do. Additionally, if your uncle built his wealth based on investments, he will likely know whether this is a good investment or not and learn from it.
For a proper analysis, I will leave it to others who are more experienced with multi-family properties.
@Nick Harrington Thanks Nick. It seems to be a definite option to partner with him. Unless there is a way for me to use his money for a down payment and pay him a % for the loan amount.
Are those other family members REALLY paying rent, or is that something they're just telling you?
I assume the aunt and nephew are mother and son; if that is the case it's likely they will want to stay since it's tough to find accommodations that are close yet separate.
@Steve Babiak They are paying rent however not at market value. I am not sure of the relationship there. They are trying to actually relocate the elderly aunt prior to selling so there are no issues with that.
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