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.

44Reply
90 views

Most Popular Reply

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?

See this reply in the discussion

74 Replies

Jump to latestLatest
  • Real Estate Investor · York, PA · Member since 2018 · 115 posts · 58 votes
    7y

    Congrats Casey! Way to do the work.

  • Tampa, FL · Member since 2017 · 63 posts · 28 votes
    7y

    That is amazing. I'm very interested in owner financing,  but  still a bit hesitant on how to bring it up  and pitch it correctly.  This was great motivation!

  • Member since 2019 · 1 post · 0 votes
    7y

    This is great info @Casey Roloff, thank you for sharing how you went about it!

  • Specialist · Huntingdon, PA · Member since 2018 · 162 posts · 147 votes
    7y

    Very interesting thread. I was interested in the nuances that convinced the owner to go the seller financing route. Thx for sharing @Casey Roloff

  • Real Estate Agent · Mobile, AL · Member since 2019 · 4 posts · 0 votes
    7y

    Hell yea, congrats, and thanks for sharing. 

  • Specialist · Philadelphia, PA · Member since 2018 · 3 posts · 9 votes
    7y

    Congrats!  I am interested on reading the 1 year and 3 year follow-up also.

  • Newton, NC · Member since 2018 · 18 posts · 12 votes
    7y

    Congratulations!  I am interested in the Seller Financing terms as well.  Also curious as to why you want to refinance under a conventional loan?

  • Rental Property Investor · Farmington, UT · Member since 2018 · 171 posts · 148 votes
    7y

    Congrats! Thanks for sharing!!! 

    Please keep updates coming as you do things such as raise rents. 

    sincerely, your neighbor in the frozen north 

  • Yuma, AZ · Member since 2015 · 140 posts · 137 votes
    7y

    Hi Casey looks like off Ave B. ? We should meet up sometime. 

  • Rental Property Investor · Minneapolis, MN · Member since 2017 · 106 posts · 39 votes
    7y

    @Casey Roloff congrats! I would love to be able to purchase an apartment complex this size in the next 10 years. I have 1 duplex now and am looking for my next 2-4 unit. How did you get into mult-family and how much do you antcipate this will cash flow once you have market rents and the storage unit rented?

  • Member since 2019 · 4 posts · 1 vote
    7y

    Strong work. These stories inspire me to make that 1st step. Thank you.

  • Muskogee, OK · Member since 2018 · 9 posts · 9 votes
    7y

    @Justin Lee Frye

    I think after raising the NOI, the bank will lend more $.

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

    @Farrukh Amini @Jason Dufault @Trey Mattox @Mary Mcallister @Justin Frye

    Loan Terms - 500k Purchase Price @ 20% down.  5 yr Interest Only @ 6% Simple Interest.  No pre-payment penalties. 

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

    @Justin Frye. I will cash out refinance once the property is stabilized and I have raised the NOI creating a higher market value. I'll then reinvest the funds into an additional property. Check out the BRRRR method, mentioned frequently during the Podcasts.

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

    @Josh Cook. I began investing with SFR properties, and being completely uninformed I thought it would be great to acquire a 15 yr mortgage and rent the property with no cash flow. I didn't take vacancies or capex into consideration. I held the property for two years and luckily came out ahead due to appreciation. During that timeframe I was introduced to Biggerpockets and began analyzing the local market and found that MFR properties had the best returns for buy and hold investments.

    I expect the property to cash flow between $2000-$2500 per month, after taking into consideration all expenses, capex, and vacancies.

  • Rental Property Investor · Baltimore, MD · Member since 2019 · 3 posts · 0 votes
    7y

    Excellent job, congrats. I am a newbie at real estate.  What is the county assessor website?

  • Member since 2018 · 14 posts · 1 vote
    7y

    Congrats. 

  • Kingston, NY · Member since 2017 · 252 posts · 138 votes
    7y

    @Casey Roloff

    Would you have jumped on this deal when you first started? Why or why not?

  • Joplin, MO · Member since 2019 · 7 posts · 1 vote
    7y

    @Casey Roloff awesome job!

    What did your first multi family deal look like when you made the transition from SFR?

  • Rental Property Investor · Santa Barbara, CA · Member since 2016 · 6 posts · 2 votes
    7y

    @Casey Roloff, thank you for sharing this win!  

    Love the seller finance stories!  Why use a bank when you don't have to!?  

    I hope to duplicate this effort in my own market!   @timmcinerney

  • Rental Property Investor · Sacramento, CA · Member since 2015 · 1k+ posts · 893 votes
    7y

    Sounds like a good deal in Yuma! Would love to see the income and expenses. What is the going market cap rate on these properties? Do you have the ability to raise these rents?

    Love the owner fi opportunity, great work!

  • Newton, NC · Member since 2018 · 18 posts · 12 votes
    7y
    Originally posted by @Casey Roloff:

    @Justin Frye. I will cash out refinance once the property is stabilized and I have raised the NOI creating a higher market value. I'll then reinvest the funds into an additional property. Check out the BRRRR method, mentioned frequently during the Podcasts.

     So when you do a cash out refinance through a conventional mortgage are you not cancelling out all of the selling points you used to talk the seller in to seller financing?

  • Investor · Las Vegas, NV · Member since 2017 · 321 posts · 524 votes
    7y

    @Pilar Lazzati a database full of property info for a certain county.  Google 'Your County' tax assessor and look for property search.  You can input addresses and get info for the property, such as tax info, purchase price, purchase date, owner's name and mailing address, etc.

  • Member since 2018 · 9 posts · 1 vote
    7y

    @Casey Roloff

    Great job!

  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    7y

    @Casey Roloff  Congrats on staying persistent and actually door knocking to get a direct line of communication with the seller.  Takes guts to do that.  All the best.  Wishing you continued success.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.