Posted by Eric in FL on July 19, 2008 at 10:23:05:
In Reply to: Ed Garcia Help: 36-Units Apt. 75% Seller-Finance posted by VanMD55 on July 18, 2008 at 22:03:08:
First, take a very deep breath and realize this is an investment and it takes a ton of research to even come to an offer. The first thing to do is if you are very serious after crunching numbers is a LOI (Letter of Intent) through your broker. At first glance there are some real problems with expenses:
1. Repairs - NONE!!! Come on. I own college rentals and the repairs are at least 30% - 40% higher than typical multi's. Hence you need to have rents and or revenues increase accordingly.
2. 75% note of LTV. Good deal if you can go to a small bank and justify cash flows. If this guy is not willing to share expense numbers until you come together on an offer tell him the bank requires them. You may only need to have the owner hold a 50% note.
3. Call the owner directly - I will often call the owner directly to discuss the offer and structuring of debt. I am not trying to cut out the brokers at all but it saves a huge amount of time. 99 times out of 100 brokers don't own any real estate and they have no idea what they are talking about. The owner is paying the commission not me.Go with the LOI with a deposit of xx amount when the offer is accepted.
Best Regards,
Eric