Owner Financing - 11 Unit Apartment Complex

Owner Financing - 11 Unit Apartment Complex

Investor · Yuma, AZ · Member since 2016 · 48 posts · 88 votes

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $500,000
Cash invested: $100,000

11 Unit Apartment Complex

What made you interested in investing in this type of deal?

I became interested in this deal because of the success had from two previous Multi-Family investments.

How did you find this deal and how did you negotiate it?

I found this deal by searching every single multi-family property through out the county assessor website. I then narrowed down a list of properties that would be within my purchase price range. I found the owner's address and went to their doorstep asking if they were interested in selling. At the time they were not interested but asked me to check in with them at a later date. A year later I wrote a handwritten letter and received a phone call stating that they were ready to sell.

How did you finance this deal?

Initially the seller wanted to sell the property through conventional means, but through my Biggerpockets education I was able to confidently explain property valuations and the benefits of owner financing. The owner agreed to a down payment less than the conventional financing requirement. I purchased this property at a 9.7% cap rate.

How did you add value to the deal?

I plan to reduce management, and landscaping expenses and raise rents to market rent. There is also a large storage unit on-site and I plan to rent that out as soon as the previous owner removes their personal belongings.

What was the outcome?

This is a new acquisition and the outcome is yet to be seen. I plan to refinance through conventional means once I have effectively raised the NOI.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Cheryl Lakey of Chicago Title has set up the financing documents. Strongly recommend.

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Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
7y

Awesome job. You mentioned the seller initially wanted to sell conventional, do you mind sharing what his motivation was for going owner financing? Tax breaks? Higher sale price? Not having to pay a broker? Or all of the above?

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  • Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    7y

    @Casey Roloff

    Congrats on a successful closing! Hard work and dedication fully paid off!

  • Real Estate Broker · Chicago, IL · Member since 2016 · 52 posts · 25 votes
    7y

    very inspiring.  Thank you for sharing!

  • Rental Property Investor · Long Beach, CA · Member since 2016 · 12 posts · 4 votes
    7y

    That's the way to create a Great opportunity for yourself! Congrats!

  • Member since 2018 · 42 posts · 31 votes
    7y

    I salute your hustle, my friend.  Congrats.

  • Rental Property Investor · Portland, OR · Member since 2009 · 82 posts · 30 votes
    7y

    nice work. The personal touch and time (among other things) worked for you.

  • Rental Property Investor · Novato · Member since 2015 · 6 posts · 2 votes
    7y

    Good job man. What city? B or C class area?

  • Orange Park, FL · Member since 2017 · 8 posts · 2 votes
    7y

    Great job with acquiring this place! And random but I was born & partially raised in Yuma. You don’t see too many people from there. 

  • Adelanto, CA · Member since 2018 · 3 posts · 0 votes
    7y

    Hi, very interesting story. Congrats to you. Thx for the knowledge. How is employment, crime and schools in Yuma AZ? Thx, Donald Barre

  • Contractor · Ventura, CA · Member since 2018 · 7 posts · 5 votes
    7y

    Awesome job Casey.  Will be using some solid takeaways from this for myself!

  • Investor · Yuma, AZ · Member since 2016 · 48 posts · 88 votes
    7y

    @Bryan P. The property is located in Yuma, AZ. I’d say C+, I’ll be able to bring it up to a B with some minor cosmetic renovations.

  • Member since 2018 · 7 posts · 0 votes
    7y

    this is amazing! what city? what are the rents?

  • Rental Property Investor · Austin, TX · Member since 2016 · 317 posts · 257 votes
    7y

    How many doors did you knock on in addition to the one that led to the aforementioned deal? Also, do you mind sharing the bullets of your pitch to the seller on financing?

  • Rental Property Investor · Las Vegas, NV • Tokyo · Member since 2018 · 6 posts · 2 votes
    7y

    Great job, thank you for sharing!

  • Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    7y

    Awesome job. You mentioned the seller initially wanted to sell conventional, do you mind sharing what his motivation was for going owner financing? Tax breaks? Higher sale price? Not having to pay a broker? Or all of the above?

  • Member since 2019 · 2 posts · 0 votes
    7y

    Great job!

  • Rental Property Investor · Belleview FL · Member since 2018 · 5 posts · 2 votes
    7y

    Please provide an update 1 year and 5 years out.

  • Investor · Yuma, AZ · Member since 2016 · 48 posts · 88 votes
    7y

    @Garland Young. It’s in Yuma, AZ. 10 - 1/1s @ $575 per & 1 - 2/1 @ $750.

  • Investor · Yuma, AZ · Member since 2016 · 48 posts · 88 votes
    7y

    @Stephen Stokes. You’ll laugh but this was the only door I knocked on. I created my short list of properties and found that this property was in a trust. Further research found that the widowed owner lived locally and this was the sole apartment complex that she owned. I knew I had a great lead at that moment.

    I would have continued door knocking but I put a 31 space mobile home park under contract shortly after and all purchase funds were tied up.

  • Investor · Yuma, AZ · Member since 2016 · 48 posts · 88 votes
    7y

    @Stephen Stokes. Seller financing Bullet Points.

    -In Depth Knowledge

    -Confidence

    -Tax Implications

    -An additional $100k interest received given 5 year balloon

    -Steady, Stress Free income to supplement retirement

  • Investor · Yuma, AZ · Member since 2016 · 48 posts · 88 votes
    7y

    @Bill Goodland. All of the above. The seller didn’t want to deal with all of the additional paperwork required with conventional financing. She was worried about the tax implications and liked the idea of an additional stress-free, steady stream of income.

  • Worcester, MA · Member since 2018 · 7 posts · 5 votes
    7y

    This is awesome! And the part that people probably underestimate is the grind it takes to find the deal. Well done!

  • Rental Property Investor · Jersey City, NJ · Member since 2018 · 176 posts · 80 votes
    7y

    Congratulations! Great job! 

    I’m curious to learn about the finance details and terms of your deal. Would love to get an idea of what rate you agreed upon, how long, etc. 

    Thank you in advance!

  • Rental Property Investor · Richland, WA · Member since 2017 · 2 posts · 3 votes
    7y

    nice job Casey, heck of a find. I agree with Farrukh, as I would be interested in the terms you put together for the deal. I have one very very similar to this, even pricing wise and would love to have the seller financing option in my pocket to present.

  • Attorney · Richmond, VA · Member since 2018 · 8 posts · 10 votes
    7y

    @Casey Roloff congratulations that is awesome. I would also love to hearing more details on the terms of the owner financing aspect of the deal.

  • Real Estate Agent · Asbury Park, NJ · Member since 2015 · 8 posts · 9 votes
    7y

    Your hard work paid off, congratulations! Please do provide details on the owner financing, which seems like the key to winning the owner over. Thank you and good luck with it!

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