I have been negotiating an "off the market" apartment deal for a buyer of mine in WA state for the last month and it seems we may have come to an impasse. The transaction is structured as follows:
Original asking price when listed 1 year ago 1.36 mil
Vac Rate: 1%
Cap Rate: 6.30%
Gr Sch Inc: $138,804
Ttl Mnth Inc: $11,567
New roof, sliding glass doors, decks 2007, very good condition. Three 4-plexes on three separate tax parcels and a seller willing to carry a note on 2 of the 3 buildings. We offered 1.245 mil with conventional financing on one of the 4-plexes and an owner contract offering 10% down, a 5 yr term at 4.5% int on the other two. The seller countered back with 1.32 mil 10% down, a 5 yr term at 5.5% int. Our last counter was 1.29 mil, 10% down, a 5 yr term at 4.5% Int. Their solution was to counter with 1.32 mil, 15% down, a 5 yr term at 4.5% int after which I immediately scheduled a meeting with their broker who happens to also be the daughter of one of the 4 owners. She presented us with all of the pertinent data and my buyer said he would run it by his appraiser buddy and get back to us. The meeting was on the 1st and we all decided to take a break for the 4th and resume after the holiday. On the 5th the buyer said he was going to run the numbers and analyze the data that night and I have not heard from him since. I reached out to the buyer today after receiving a message from the seller's broker asking about the buyer's status. Am I missing something? Any ideas?
Park Place Realty NW
If I understand correctly, you're simply not getting positive communication from the buyer. Are they hard to deal with or sketchy?
The buyer said they were concerned with cash flow and could put more down so the seller attempted to satisfy their request by giving them their desired rate, but requiring a higher down in return. Less down = higher rate by any lender's standards. He didn't like the down payment increase and demanded we stick with his original terms, which forced me to call an emregency meeting. He just left me a message apologizing for taking so long to get back to me so we'll see what happens when we connect.