All Forum Posts by: Jack Middleton

Working on my first deal and got a roadblock before offer was written.

The unit is an 8 plex owned by a woman with nothing owed on it.  This has been for sale for a little over a year.

Asking $199,900

I asked the broker if she would do seller financing, since she doesn’t owe anything on this and she was open to that.

A little detail- Cap rate=12% DSCR=1.9 COC (based on my offered down payment)= 109%

I offered full price with $5,000 down, 4.5% with a 20 year amortization and a balloon in 5 years.

She came back with $25,000 down and a 2 year balloon.

I countered with $12,000 down and a 3 year balloon.She (and her grandson) wanted to settle on a 7% 3year, but they wanted to stick with the 25K down.

I don't have 25K at the moment, so I was wanting to stick with 12K

The broker mentioned that she would need the 25K because her closing cost would be around $15K.

I told him I didn't think we would have closing if she is financing and was told that we would go through the normal closing at the title co. and she would need the closing.

So, I am confused.  I contacted a broker that I have been working with and he said that sounds absurd. Unless she has a note (I asked and there is none) or unless they were wanting her to pay a fee up front.

This would have been my first commercial deal, but I’m thinking I’ll need to walk away.    Maybe check back in a few months….Any thoughts?

This negotiating is exciting, none the less.

@Linda S.  Thanks for the information.  That may be the case - I'll see if he misunderstood.

@Mateo Carrera  Thanks a lot.  I may try the collateral idea.  I didn't think about that, I should have enough that way.  Thank you for the idea.

I looked at a duplex and got approved for the loan through a lender. All seemed good until I asked why they want 25% down. After he explained that it was a rental, I commented that I wanted to live in one unit and was looking for a lot less down than 25. He informed me that it wouldn't fly because I have two other rental properties. Is he correct? I thought the idea behind house hacking is to live in one unit to get low down payments.

Thanks. Sounds good. What do you have for sale there?

Don't mean to but in, but concerning creative financing for apartments... I read a post where there was a deal that the offer was over the requested purchase price (as long as appraisal supported it) and the seller gave a discount. The result was that very little or no down payment was needed. Does anyone know how this works and how it's structured? I have been dealing with a complex that is under priced and rents haven't been raised in years. My figures look good on this, but I don't have enough of a down payment. I can attach the figures if anyone needs to look.

I have a company match, so I'm getting some free money. I draw every once in a while to use for real estate. I can turn 401k money that gains 3% into an investment where I can gain 15- 20% ROI.

Does anyone know what kind of area is the 400 block of S. Arlington st.?   Is this a war zone, or 'B' or 'C'?  

Thanks. I should have thought of that.

Cody L. I would like to find out more about the methods you have listed. Could you PM me? I have been trying to find out how to come with a down payment on an 8 unit that is reasonably priced.

Kat W. thanks. We hired someone to do a few things, then did a couple ourselves. I think part of that may be her emotional attachment (we know it's not good) because we are renting a house that she bought before we were married.