Two offers on every stale small multifamily: cash/hard money and seller finance

Louisville, Kentucky
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Two offers on every stale small multifamily: cash/hard money and seller finance

Rob Bergeron
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?

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Kerry Noble JrPro Member
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
1w

I like this strategy!

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  • Kerry Noble JrPro Member
    Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
    1w

    I like this strategy!

    1Reply
  • Dan Duenas
    Lender · Member since 2026 · 33 posts · 19 votes
    1w

    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

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    • Rob Bergeron
      OP
      Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
      1w

      We do 7% down!

      0Reply
  • Andrew Horowitz
    Charleston, SC · Member since 2026 · 28 posts · 11 votes
    1w

    Rob and Dan, these are great strategies. Thank you.

    Andrew

    1Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    1w

    @Rob Bergeron

    Seller financing can work well with small multifamily investments where the seller is equity rich and needs the income, but not an up-front payment. I think that the best way to go about this is using a simple system involving a good down payment, below market rate or fixed rate if available, and amortization period and balloon payment period.

    Good luck!

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  • Rob Bergeron
    OP
    Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    3d

    Wale, that structure is the one I keep coming back to: a real down payment, a fixed rate, a long amortization, and a balloon date everyone can see coming. The balloon is the part I'd press on, because it's what turns a good seller note into a problem if nobody plans for the refinance. How far out do you usually set it, five years or seven?

    Andrew, thanks for reading. If there's a particular type of seller you're trying to approach, tell me and I'll walk through how I'd frame it.

    0Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    3d

    The shotgun approach somehow never worked for me - I had major success choosing a few most promising deals to “work” and giving those my attention and effort. Built deep relationships and that sometimes led to some killer deals. BUT, I know the “shotgun” throw the offers out there approach does work for some investors.

    I’d like to hear specific investor results from people who have used this shotgun offer approach as to cost, return, etc.

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  • Rob Bergeron
    OP
    Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    3d

    189 LOI's went out last week, 7 under, waiting on signatures on three more. Nothing beats the power of persistance and follow up!

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