All Forum Posts by: Christian Beebe

Mike, 

Some information is correct, some isn't.  They are not in the apartment business, they only buy single family homes and they have about 8000 of them. These buildings were a package deal that came with a home that the purchaser at that time for them bought without really thinking...they have a ton of money.  So since it's not in their business model they want to sell it.  Property is completely under market rent by at least $200 a unit, garages aren't being rented out and expenses are way too high...like spending $1000 a month to have someone pick up the property, once a week.  

By raising the rent to the correct levels and reducing the expenses AND with debt service, the property would cash flow easily at $50-60k per year.    They bought it for $200k in 2010, market rates for this type of property in our area in EXCELLENT condition is $29-$31k per unit.  This is not in excellent condition, I'd say 6 out of ten so around $26k per unit sounds right.

They came back and offered to seller finance it at 65% ltv with obviously 35% down at 8% for 3 years with a balloon penalty if not refinanced by that time.  Which, these numbers make no financial sense versus just doing a "regular" loan.

Appreciate the responses and this helps out some.  In our market and the condition we saw the property in yesterday, the cap rate would be around 8.5%.  We basically made an offer for 5-7 years of them financing the entire thing and gave them several reasons this would benefit them, mainly a better financial return in the long run and instant sale.  If they don't need the money per se, then it's a win/win for everyone if they do it.  We offered $295k for a straight sale (needs about $50-70k worth of work in the next couple years easily.  boilers, waterproofing, foundation on one building, etc) and offered $325k if they seller financed it at 5% for 5-7 years while putting 10% down.  I believe they know they need to get rid of this property for multiple reasons and know that if they put it on the market, it's going to take a bit to get sold and then 60-90 days to close if they go the regular financing route.  

Keep you all update but thank you again for the help

So although we've been doing real estate for a long time, we've never really done any seller financing till now.  

We have an apartment complex consisting of 15 units owned FREE and CLEAR. NOI is around $30k and the seller wants US to give them a price...they do not have one. The deal is solid so since seller financing is not our forte, need help or thoughts from those of you who know what they are doing.

Based upon our market, cap rates for this type of property in this are 8.5% which means we come up with an initial purchase price of around $352,000.  Also there is NO broker involved as this is an off market deal so they know they are going to save 6%+ off the top for no fees.  Beyond this, there is definitely some work that needs to be done to the property, nothing major (yet), just some good sweat and labor to fix some water leaks, make the place look better, replace boilers, etc.  Probably about 6-8 months of solid work for about $30k or so.  Property is currently 100% occupied and rents are nowhere near market rates.  Again, solid opportunity.

The company that owns this does NOT need the money (they are huge), this is something that they have by accident five years ago they are looking to get rid of as it's not in their wheelhouse.  

They bought it for $210,000 in 2010 and the market this property is in, is strong right now as people are buying properties left and right out of state without even looking a them (Midwest)

So, with all this in mind, we want to come up with a seller financing deal that would make sense to a company in this situation.  First of all we realize anything is possible but from a typical standpoint, what type of situation or numbers make sense or what would you offer or think about?  We are looking for reasons why this would benefit this company.  We are looking for scenarios of "we will paying a higher price of X if you finance this for five years at X rate".

And if even they don't finance the entire thing, let's say they just finance a good portion of it, 20% or more...again, what would be "typical" in this regards...five years?  less?  

I hope this all makes some sense, just need some people who have done this plenty of times before and can help us put together something that's a win/win for both sides.  

Thank you in advance.

Simmy, just emailed you.

Melissa McGuire, our website is currently down for maintenance but you can email per above or message me directly and we can setup a time to talk.

Appreciate it and sounds good.

Pri, as long as the deal makes sense, we will work with anyone.

We are an investment company in the Midwest that has been doing REI for nearly 15 years with our main focus being apartment buildings 10-100 units, B & C Class. We know our market extremely well and the cities and areas that are worth putting time into now and the coming years. Our entire process is a machine that knows how to take a property, typically under valued, and turn them around into very nice producing properties with much less overhead and maintenance.

Our strategy typically is to purchase $1M - $5M assets that are stable but present an opportunity for us to add value. Perhaps the rents are under market, the building needs renovation, the vacancy is low, or we purchase for a low price from a motivated seller. The buildings we seek tend to be B to C type assets located in areas that are rapidly improving.

This gives us the opportunity to purchase an undervalued asset in a good area, thus allowing us to create value for the investors within 2-3 years. At that time we may re-finance to return the investors’ principal yet maintain their equity ownership and cash flow.

60% of our properties we buy and hold, while the rest are rehabbed, rented, and then flipped.

Due to our location, expertise, and marketplace we have an abundance of assets worth bringing on board and will be needing investors.

We are not looking for banks or lending institutions, as we mainly find ourselves working with individual investors, families, foundations, trusts, and endowments looking to build and protect long-term wealth.  Due to our heritage, we enjoy helping people growing their dreams and helping them achieve a little less risk and more stable income in today's world.  

Typical minimum investment is $100,000 but we have entertained lower amounts if we feel, per above, that it will bring happiness and better future to that person.  

Contact us at [email protected] for further information or to present your desires/capabilities.

Look forward to hearing and working with you.  

We are an investment company in the Midwest who expertise is apartment buildings for the last 15 years.  Our expansion this year and 2018 is 400-1000 units so we are looking for apartment buildings in these cities:

Cleveland Cincinnati Detroit Columbus Pittsburgh Kansas City Louisville Indianapolis 

Off or on market is fine.  Primarily B & C Class value add opportunities.

Seller financing in any regard is a plus.  

Please contact us below with any opportunities and of course marketing information, financials, etc if you have them.  

Thank you

Christian

[email protected]

Upen, appreciate the response, you are more than welcome to drop me a line at [email protected] or let me know a good time to talk this week.