Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
In Jefferson County, KY right now there are 153 multifamily buildings for sale. 38% have cut their price, 69% have been sitting 60+ days, and September sales closed at 90.6% of original asking. Put that next to the $875 billion in commercial loans coming due this year and you've got owners with a date on the calendar and a building that isn't moving.
So here's the play. Send LOIs. An LOI is a letter of intent, a one-page, non-binding offer that says here's what I'd pay and how I'd pay it. Two offers on every building. One is cash or hard money, a fast, clean close at a lower number. The other is seller financing, closer to their price, but the seller carries the loan and you pay them every month instead of a bank.
Make them say no. A no costs you nothing. And every no is an owner who knows your name when that balloon comes due. Make 16 offers to get one.
How are you all structuring seller carry on small multifamily right now?
Rob — the seller-carry structure I see working best on stale small multifamily right now: 10-15% down, seller carries the rest interest-only for 3-5 years, buyer stabilizes the property, then refinances out with a DSCR loan as the takeout.
Two reasons DSCR fits the exit specifically:
1. It qualifies on the property's rental income — no tax returns, no W-2s, no pay stubs from the buyer — so the refi is underwritten on the improved property, not the buyer's personal finances.
2. No seasoning requirement, so the buyer doesn't have to sit on the deal for a year before refinancing out of the carry.
The part that kills these: the balloon. Make sure the carry note gives enough runway to raise rents before it hits — 3 years minimum, 5 is better. And have the takeout lender lined up before the carry closes, not after.
Happy to sanity-check a structure if you want a second set of eyes — Dan