Hello Everyone,

I have a contact that I made a couple of years ago, and he has offered to sell me a 12 unit apartment building, with 100% owner financing. No money down. He has several hundred units and he is looking to start downsizing for retirement. No money down seems like a tremendous opportunity. Plus my figures estimate that I would be getting the property for 50-100k below market value. We currently own a 4 plex, and 2 sfr's. so this would be a big step up for us.

My issue(s). this is in a C to C- area. Gross rent is $565 per unit, $6780 per month. Taxes are very high, $13,000 per year(I believe it. I have a 4 unit that is 4k in this town). Flood insurance is required because this is near a levy on the Mississippi river. Insurance is $12,500 per year currently. One unit currently needs about 10k of work to be rented out, it is mid renovation. Property was built in 2003-ish.

Gross year rent = $6780

Taxes - $1083

Insurance - $1042

Wat/Sew/Trash - $350

Est Mtg Pmt - $2,100

cap ex/maint/vac- $1800

Cash Flow = $405.00.

This is not a large amount of cash flow for a 12 unit building. I feel like the risk factor is fairly high with this deal. I love that we would be given instant equity with $0 down, but I just don't know if the risk is worth it.

Any Advice?

Thank You!!!

I didn't find the right solution from the Internet.

References

https://www.biggerpockets.com/forums/32/topics/492402-purchasing-a-100-owner-financed-12-unit-trouble-pulling-trigger

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