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16-Unit Apartment Building, So Great!

by Brad Boone   

I have been buying houses since I was twenty and have been reading many books and enjoy your website 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 building, 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 prorated. 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.)

 
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