Posted by ken in sc on January 25, 2001 at 08:42:12:
if he sold to someone he just met for basically no money down. Think of the risk to him if I did not pay and did not keep up these houses that are currently in very good condition.
Help on multi-property aquisition - Posted by ken in sc
Posted by ken in sc on January 24, 2001 at 07:18:54:
I have a great opportunity to buy an investors entire portfolio. He is ready to get out of the business due to his age. There are 12 houses, all in good areas around town, all look to be very well kept from my drive-by inspection, all are currently rented. He is willing to sell for 85% of full retail value.
The best part is that he will owner finance at 1/2 point below market rates for 30 yrs with no balloon! The main reasn he will do this is to not have a large sale in one tax year of all these free and clear, fully depreciated properties and thus pay major taxes. He is open to any arrangement that will keep him from paying taxes. He likes and trusts me so we can be as creative as need be.
Now, my problem. 15% down on approx. $800,000 is…, well lets see, uh… ALOT OF MONEY! More than I have free at this time.
Of course, bringing in another investor is the obvious answer. But, can anyone think of a way I can do it my self? This is a great opportunity and I want to study all possible ideas before I get back with him.
Thanks in advance for any ideas. Ken
Re: Help on multi-property aquisition - Posted by Dave T
Posted by Dave T on January 25, 2001 at 18:27:02:
Will he give you clear title at settlement to two of the properties? If so, market those properties now for sale. Set the sale price high enough that you net $120K.
Conduct all closings simultaneously, so that your sale proceeds satisfy your down payment.
Re: Help on multi-property aquisition - Posted by phil fernandez
Posted by phil fernandez on January 24, 2001 at 08:58:58:
You haven’t mentioned the cash flow yet. Will all of these properties produce a good positive cash flow after vacancy,operating expenses, reserves for replacement and mortgage payments?
Why does your seller need 15% as a downpayment. That’s $120,000 that he will be paying taxes on. Just the thing he’s trying to avoid. If he’s solid on his $120,000 cash down, I’d create two seperate notes. One being a 1st that you could sell to a note buyers at the closing table. That would give your seller his $120,000 cash. Then your seller would keep the 2nd and receive payments to spread out his taxable gain.
Re: Help on multi-property aquisition - Posted by ken in sc
Posted by ken in sc on January 24, 2001 at 12:10:03:
Yes, cash flow would be great with this financing. I think he wants the 15% down so that he will be at a 70% LTV, this a “safe” position. He would not want to be in a 2nd position. This man is a smart businessman - he owns a multi-million dollar business besides these houses.
Well How Smart Is He… - Posted by phil fernandez
Posted by phil fernandez on January 24, 2001 at 20:36:37:
if he is trying to avoid gains taxes and still wants the $120,000 up front as a down so he can pay Uncle Sam about $40,000 of it??
Re: Help on multi-property aquisition - Posted by Bill, SC
Posted by Bill, SC on January 24, 2001 at 13:15:03:
If you were able to borrow 120,000.00 @ 12% would the prop. still cash flow? If so I might be interested.