All Forum Posts by: Brett C.

Team I'm looking for help on putting together a deal with 3 multi family properties.  The seller and I are a very good match for eachother and have discussed a deal where I would acquire all 3 properties and seller financing would be available.  

Facts:  all 3 properties are on ONE loan and I am fairly certain they bought them as a bundle and ALSO used seller financing some years ago.  It worked well for them to grow their business and they are savvy enough to appreciated the benefits of holding paper. 

My want - What is most important to me is low money down, hopefully 10%, while also ensuring I have good cash flow. 

Their need - they are looking to liquidate and retire. 

Questions:

How do I go about this negotiation?  I will provide a packet as I would a bank to show my income and credit which is very very strong.   But where do I go from there on trying to negotiate terms?

Also, how do I structure the deal and loan?  

Any help would be great.  This is a credible opportunity and one I've worked hard for.  I don't want to blow it. 

Your candor made me laugh out loud!

it definitely goes in the P&S! And obviously you should specify the specific unit that you want to be empty on the closing date. It is the sellers responsibility at that point to take care of getting them out, but obviously you need to be accommodating on timing bc the seller may need to provide time for them to leave per the terms of their month to month lease. You may also want to consider asking for the entire property to be vacant just becuSe of all the horror stories I've heard on inherited tenants. I've never inherited tenants before. I'd be interested in what others think on that subject because I'm looking at duplexes all the way up to 5 and 6 places right now.

What do you folks think about Pittsfield and Franklin?   They seem to be cheap as well and proximate to cities with plenty of work.   

Denise I've been studying that area for about 3 months.  I went to city data's website and (going from memory here) found that the RE values have been flat to declining over the last 15-20 years.  That was a concern for me, especially when you look at the inventory, it seems like EVERYTHING is for sale.  I also noted nearly every listing speaks to means of egress and that's rare.  I suspect there must have been a recent change to zoning or building codes because listings seemed to tout the cost of adding a second means of egress had already been addressed.  

Also from memory, population was flat to slightly declining.  Also a bad sign.  I couldn't seem to find data on occupancy rates.  Also, I couldn't seem to find solid management companies, which for me is a must because of the distance.  If there aren't good management companies it's a non starter for me.  

Those were my negatives, the positives are obvious - we can buy two families for the price of a 2012 Corolla!!!!

Beyond my online research my next step was to start calling agents and asking questions about the market.  Remax appears to be he biggest office.  Depending on my discussion with the agents I was thinking of heading up for a weekend to see a bunch of properties and get to know the town.  I'll let you know if I learn anything good, please do the same for me.  

@John McRae why do you prefer Dover?  Better schools? tenants?  Or just closer to your house?  I am also looking at this area.  I am a Rockingham county guys myself but deals below 200k that can land good returns are hard to come by now.  When I look at your area, particularly somersworth, Rochester and to a lesser extent Dover, im seeing 1.5 to almost 2% rule properties.  But I'm scared to pull the trigger because I've visited some less than desirable neighborhoods when I go out there to check them out.  So far I've got two properties in B+ neighborhoods and C neighborhoods scare me but I'm tempted by the returns.  

Any insight into the area is very very much appreciated.  

I think a spouse is no different than anyone else, they need a reason to trust you.  Do you have a credit score in the high (very high) 700's, are you very responsible with spending, with debt?  Have you been able to predict your net worth months and years in advance via a detailed spreadsheet?  I had a spouse who wasn't on board.  I could answer yes to all those question for years, and so I showed her the spreadsheet and then she let me invest again and then again. And each time the investment delivered exactly as I predicted.  She trusts me now and I am free to invest as i see fit. 

A track record is important for life partners as well as business partners. 

Thanks everyone.  

The tenants kind of don't have a choice, I could ask to receive the property empty, so nicely explaining to them that I'm going to screen them and then transfer the lease doesn't sound unreasonable to me.  That's my thought anyway.  

With regard to potentially losing the deal, I think you are all right it could spook or aggrevate both the seller and the tenants.  But I worry about inheriting headache tenants, so much so that I kind of don't want to buy unless I at least get to meet them and do a check to make sure they pass my criteria.  

Don't other investors get freaked out by inheriting tenants they know nothing about or is that just me?  I may be scared more than I should be because I've never inherited tenants before?

Hey Investors.  I'm writing an offer ( NH property) on a two-fam with tenants in place.  I may or may not want to keep the current tenants.  How does this work in terms of contingencies in my offer?

Ideally I'd like to screen the current tenants and transfer their lease into MY lease on the day of closing if they pass my criteria.  Can I do that?  I know I can make my offer contingent on the property being empty, so why couldn't I make a contingency that says I have 10 days after the home inspection to screen and ensure the tenants will agree to my lease terms?  Or something like that.  

Ideas?