The Simple 3-Step Process to Buying Big Multi-Unit Deals

March 12, 2012 | By | 2 Replies More

Here is my simple 3-step process to big multi-unit deals…

1) Market to Sellers Who Have Owned Their Properties for Ten Years or More  

This is common sense but the longer someone has owned a property, the more potential for equity. How do you find these owners?

One way would be to buy a list through a list company…  but that can be pretty expensive.

(Enter: Huge Money-Saving Tip)

I get all my lists for marketing through my local county courthouse in the “tax assessor’s office” and it ONLY costs $50 for each list.

So if you’ve been paying thousands for your lists, check with your local county courthouse first and save yourself some serious moolah.

2) Negotiate With the Seller to Take Back Most of the Financing

This is a lot easier than you may think.

On my first multi-unit deal (which was a 4 and 6 unit apartment building in Clemson, SC), the seller financed 100% of the purchase price.

Why would a seller want to finance their property?

Maybe for tax reasons. You’re only taxed on the funds you receive for selling a property, when you receive them. So seller financing is a great way to defer capital gains.

Maybe the seller has fully depreciated the property and it makes better investment sense to convert from owner to lender.

Maybe the seller is highly motivated and will take whatever offer they can get.

3) Bring in Private Money for the Cash Needed

Use private money for the down payment, closing costs, renovation, all costs associated with the deal.

And since you got the deal seller financed, you only need a small amount of private money in comparison to the purchase price.

There ya go… that’s the simple 3-step process to buying big multi-unit deals :-)

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Category: Real Estate Investment Buying Strategies, Real Estate Investment Financing Strategies, Tips and Tricks

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  1. Great advices for aspiring property buyers. But better deal with reliable realtor to get have an utmost result. Thanks

  2. Laura Wells says:

    Thanks for this article, Patrick! It has inspired me to take action because acquiring multi-unit properties like this is what I’ve been wanting to do, and finding a seller who is willing to do seller financing is for sure the main way I am going to do it. I bought a list for the main city I’ve been wanting to invest in and I’m going to be sending out letters.

    Do you have an example of what you’d recommend saying in my letter to these longtime owners?