All Forum Posts by: Thomas Bryan

Thank you everyone for your replies! My specific questions about this deal would be, 1: Is it common for a lender to give a loan of this size with the seller carrying the down payment as a secondary lean on the properties. 2. Are there any specific strategies that may work better. We will be doing this 100% financing so our debt payments will be high, leaving a thin margin of profit. We are comfortable not taking a pay day for a while, but our risk may be too high. Accounting for all expenditures and being conservative with our numbers we will be close to just over 2,000 a month positive cash.

Hey BiggerPockets! I have recently been presented an opportunity from a neighbor of mine to purchase a big piece of his portfolio of 17 properties consisting of 43 total units. The properties range from two single family, 2 units, 3 units, 5 units, a 6 unit. He currently has the 17 properties in two separate blanket loans, with enough equity in the properties to carry the down payment needed to purchase the rest. I believe we will end up around 1.6 million for a final purchase price, leaving roughly a $400,000 down payment which will be financed through the seller. How can I make this work!? It will be 100% financed. Here is a breakdown of the numbers below:

17 properties, 43 units

Purchase Price: $1,600,000 (100% financed)

Financed with lender $1,200,000

Financed with seller: $400,000

Estimated value of all properties: $2,120,000

Rents w/ 10% vacancy : $305,000 per yr

Monthly breakdown:

After taxes, insurance, and utilities the portfolio is cash positive $ 19,950 per month

Any advice would be greatly appreciated! I am working with two partners. We all have experience with rental properties, owning and managing 10 units between us currently. We all work full time jobs and have wives that work full time jobs. Salaries ranging from $45,000 - $65,000 py in a very affordable area of Northeast PA. We have researched and seen all of these properties, everything is transparent and all are within 2 miles of my home. Any thoughts, suggestions??

Thank You!

Tom

Hey BiggerPockets! I have recently been presented an opportunity from a neighbor of mine to purchase a big piece of his portfolio of 17 properties consisting of 43 total units. The properties range from two single family, 2 units, 3 units, 5 units,  a 6 unit. He currently has the 17 properties in two separate blanket loans, with enough equity in the properties to carry the down payment needed to purchase the rest. I believe we will end up around 1.6 million for a final purchase price, leaving roughly a $400,000 down payment which will be financed through the seller. How can I make this work!? It will be 100% financed. Here is a breakdown of the numbers below:

17 properties, 43 units

Purchase Price: $1,600,000  (100% financed)

Financed with lender $1,200,000

Financed with seller: $400,000

Estimated value of all properties: $2,120,000

Rents w/ 10% vacancy : $305,000 per yr

Monthly breakdown:

After taxes, insurance, and utilities the portfolio is cash positive $ 19,950 per month

Any advice would be greatly appreciated! I am working with two partners. We all have experience with rental properties, owning and managing 10 units between us currently. We all work full time jobs and have wives that work full time jobs. Salaries ranging from $45,000 - $65,000 py in a very affordable area of Northeast PA. We have researched and seen all of these properties, everything is transparent and all are within 2 miles of my home. Any thoughts, suggestions?? 

Thank You!

Tom

Thank you @Dave Foster!!! that was a very helpful response! 

Hello BP! I have a few questions regarding the sale of my four unit apartment that should be a CPA's dream! I bought the building in 2013 for 74,000 as a three unit that needed work. I since converted it into a four unit and lived in one of the units from 2013-2017. I now have a buyer interested in the property for 165k. So... (1) Since I lived in the property for two of the last five years am I exempt from all of the capital gains, or a quarter of the gains? (2) I have a HELOC (home equity line of credit) on the property that I did not utilize. Can I use the HELOC before the sale to add more debt to the property to lessen the gains? Is that frowned upon? (3) I will be looking to do a 1031 exchange if I need to. The purchase I have in negotiation would be a portfolio of several rentals that would be purchased under owner financing. Can I still utilize a 1031 exchange for the down payment to the seller with a seller financed deal? Any help on this would be greatly appreciated!

Thanks!

Tom Bryan

Great tenants are such a valuable entity in rentals! I have a 4 unit that I bought 4 years ago. One of my tenants has been in the same apartment for 12 years! He looks after the property, pays rent on time, and has become a trusted friend. It was great to have him living in my first investment because I tend to screen my tenants to his standard. I believe he has helped me avoid mistakes and keep good tenants. A good tenant will keep your spirits positive and keep you investing in the game.