Need advice on multifamily opportunity
Hello BP community,
I have an opportunity to purchase a 3 unit investment property and I was hoping to get some advice from you guys. Seller is asking 235k for it and its in a nice area with a good school district. 3br+2b rents for $875, 1br+1b rents for $595 for a long tenant who's has been there for a long time, and a 1br+1br for $650. With my financial situation, i will not be able to get a conventional loan so I was planning to use a commercial lender. The seller was wiling to carry 30-35k for the down payment but did not get into details for the terms. Expenses for the year are $6610 according the seller. That does not include repairs, cap ex or management. Would it make sense to have the seller carry majority of the down payment? It does not look good in terms of cash flow. Am i missing something? Any advice would be appreciated.
Most Popular Reply
@Ephrem Bekere the big issue you will have trying to negotiate a seller second is that the 1st position lender will want to see adequate cash flow to cover all the debt. If the deal is too skinny to cover one loan, there is no way you will get someone to cover two. Use this to push the seller to carry the whole note for a time until you can re-position the property and get traditional financing on it.