How Do I Structure This $300,000.00 Deal
I'm going to try to make this short and to the point. A mortgage Broker I know has a seller who wants to sell his thirteen unit apartment building which is in good condition, fully occupied at $550 per unit. The apartment building is worth $400K. He is willing to sell it for $300K. I have a investor that happens so be a friend of mine who is interested in purchasing it. How do structure this where I can get my profit. Their are no REA's involved in this deal. Is it fair for me and the broker to split 6% of the sell price as our fee? which would be 9K each With a sell price this high, I would deffinately want more than a $500 birddog fee. Any input would be greatly appreciated.
Get an option on it and sell or assign the option.
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Please explain to me how the option would work?
I don't do options I do short sales. Yet by no means do you bird-dog that!!!! Someone else can give you particulars on that I'm just giving words of encouragement. Do not give up that deal for anything less than exactly what you want. Investors are everywhere if someone is a cheap-skate move on. Happy hunting
I would purchase the property "subject to" whatever financing is on the property with a baloon payment in lets say 30 days. Also include a 10-day cool-off periord (i'm unsure of the legal wording off the top of my head) which would give you the security you need to get a purchase contract from your investor/friend. Just in case he backs out you also have that cooling off period in which you can back out. Explain what you are doing to the seller of the complex and he/she should have no problem.
There may be an easier way to do this although this is extremely easy. I'm interested in seeing what everyone else thinks.
Sign the seller to a contract for 300k. Then flip the contract to your investor for say 315k to make your profit. It sounds pretty clear cut. You can make a good profit off this deal but don't get to greedy.
How motivated is the seller? If he will sell the property "subject to" take posession in a land trust and pass beneficial interest etc. to the buyer upon sale for your fee?
You might pay $ to the seller for a 90 day purchase option (assignable).
There are many ways to tie this up out there. Don't count on the broker splitting his fee with you.
Also, $500 for a bird dog fee? Only if my anticipated profit was real skimpy. I always believe you take care of the people that take care of you..
HOw do you know it is worth 400k? property like this is only evaluated upon NOI. Find this from his schedule C. His net operating income would have to be 40k a year or better.
Your friend knows about this property? How much is he willing to pay, or how much is he willing to let you make? Take the lower price get it under contract from the seller, and either assign the option, or sell the option to your buyer for the difference. Any RE atty should be able to draw up the proper docs for you.
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