Background – I currently own 4 rental houses… closing on #5 later this month.
Banker we deal with for financing tells me when he was looking at house #5 that they have foreclosed on a 12 plex in a nearby town.
He sends me some information on the property and by my estimation the rents are pretty low for 2br apt 20 miles from a big city ($425)… but only 2 of the 12 units are currently occupied (of course he says with the proper management it should be close to full)…
My issue: while I have some experience with SFH (about 3 years) and would like to get into some multi-family units at some point (and I had figured I would start with a 4 plex also)… I am concerned about 2 of the 12 units being rented and having enough cash to support the property until the repairs (I’m assuming) can be made and can start getting more units rented.
My proposed solution: go investigate the town and other multi-family units to see if they are full and what they are getting for rent…evaluate growth of city and major employers in area. Inspect complex and get an idea for what underlying issues are – is complex in bad neighborhood, units outdated, etc.
Why I started this thread: Has anyone ever talked with the bank who has the foreclosed property about deferring payments for 1 year? This would allow me to get repairs made and get units occupied without a huge financial worry during the short term. Or are there any other creative financing deals I could research?
Any thoughts appreciated about how others have handled/or would consider handling a similar situation…
thanks…
clarkd32