$500,000 16-Unit Apartment Building, Nothing Down

by Brad Boone

I have been buying houses since I was twenty and have been reading many books and enjoy your web site very much. I have come to one conclusion that is "the smarter the seller the easier the sale." I just bought a 16-unit apartment, and could not believe how great it was.

I called the seller and asked if he would be interested in selling. After getting up off the floor after he said ""yes," I asked some questions and told him I would put something in writing and get back with him.

I wrote an offer and we talked many times, and here is what I got. I found a bank to give me a loan for $300k, and then the seller agreed to take back a second for $200k. Thinking I would have to put in $50k of my own money, I asked the bank if I could get the loan for $300k rather than $250k. The bank said "yes" within hours. (Always ask you may be pleasantly surprised.)

The total price of the building was $500k. Then we closed in the middle of the month, so I got all the deposits and the rent proration. Then on the first, I got tenants making the next months' rent payments before I ever had to make one payment.

The rents are $100 to $150 under market value per unit, but I will not raise them for a year. Thank you for all of your interesting posts, and best of luck to everyone. P.S. The seller was a litigation attorney