Re: Need help in deal structuring Don’t loose him. - Posted by Jim IL
Posted by Jim IL on November 22, 2000 at 19:55:33:
First, forget about “Why” this seller wants to get out of a good property.
You may never understand, or know what it is like to be in his shoes.
The key is to find out “What” his needs are, and then try to fulfill them while making a profit.
Maybe he just does not like landlording?
Bottom line, talk more to him and listen to what he has to say.
He may say, "I like the cash flow, but cannot handle the management of the property right now."
You can now solve his “Problem”.
Structure a deal where he gets some advantages and so do you.
Without more numbers it is hard to tell you what exactly to do, but a few ideas do come to mind.
Perhaps a L/O on both?
Set a good price and a nice low monthly payment.
If the seller says something like, "I just want to get my money back out."
Ask him what that amount is?
If it is small enough, and there is equity now to support it, then write the price as "Mortgage balance at time of close plus $x,xxxx."
Then, your price goes down as you pay him and he pays the loan down.
I’d also want to know what the rents are per unit, and what market rents are for units like this?
Can you increase it?
Are there leases in place?
What small improvements can you do to increase the cash flow on this deal?
Lots of Questions to ask and get answers to.
Post more after you meet with him and I’m sure you will get more responses.