I got a call from a guy whose friend is terminally ill. The owner who is terminaly ill has two brick duplexes next to each other on separate lots. All four units are rented for $500. They might be capable of renting for $600 each. New roofs, hardwood floors, window AC units. Low maintenance if there is such a thing. They are owned free and clear the man just wants out now to have some money to enjoy what’s left of his life.
I’m not that interested in landlording, again. But I’m attracted to these two buildings if there is money to be made. I’m just out of a divorce and have no money and no credit. I do have good income.
How can I get these financed if the owner will take an offer low enough that makes sense to me?
You didnt say whether owner financing would work or not? I bought 3 duplexes on land contract last year from a couple last year where the husband was in poor health. He passed in the middle of the deal and im making payments to the widow. Two of them were on adjoining lots like this.
If he wont do a straight contract I would start with a small local bank that lends for its own portfolio. They hold the loan in other words. Maybe they would loan 60-75% of the purchase price and allow the seller to hold a note for the balance with you using a little cash and all the credits involved for 10-15% of the purchase price.
Keep us posted on how this turns out. Many times an owner just wants to be done with the management of the property. I should be closing on a 12 unit deal in the next few weeks for less than 1.5% of the purchase price out of pocket. Yeah, you read that right, one and a half percent!
The small bank would allow both buildings to be on the same loan by the way. If the 1st bank you visit isnt interested try another one.
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Given limited funds and credit, consider owner financing or leasing possibilities with the present owner. You can also look for partners, private lenders, or hard money lenders. When pursuing traditional lenders, attempt to emphasize the potential for rental income in your application. Overall, make sure you do your homework and get expert advice before making any judgments.