How Would You Handle This?
I am looking at a 31-unit apartment building where the seller is asking 695K. I can get financing for 65% of appraised value of the property. Out of that 65% I can pay the 3% finders fee and my closing costs! A no money down deal! How would you approach the seller and say that my offer price is 60% of whatever the appraisal is?
Thanks for your help! 
My guess is your best bet is to find out what the seller's motivation is, and tailor your offer that way. If he is not "motivated" it could be a hard sell.
If the property could support a higher price than the 65% you could also look into asking the seller to carry a second.
There are probably people reading who face this regulalry and could offer further insight.
You got 1 hill to overcome and that is what the appraisal will come in at. Your looking at spending in the vicinity of $1200 for a commercial appraisal...out of pocket non-refundable of course.
Will he take 60% of the appraised value...who knows...offer it out...if he says no then so what ...thats what your willing to do..... If he wants to much then pass and go onto the next deal in the pipeline......
The other thing is offer what your willing to do....if he says no...then let the property sit on the market. He may change his mind eventually. I would say that his answer is probably going to be no, because really your offering 60% of an unknown.....
why not do this... offer 700K (full offer) with a seller carryback of (280K) he's then selling the property to you for 420k(60%) the bank is financing 700k and he is giving you back 280k cash at the closing...
Realistically that what your saying anyway (60%) only here that other 40% is going into the most important place....your pocket
We agree with Marcher...you need to perform a thorough due diligence. Take your time.
Can the owner produce supporting documentation as to the cash flow performance of the property? Determine the motivation, determine the fair price, present a solution/offer which creates a win-win for each party.
Eric & Rosa
[addsig]
Thanks all for your replies.
The seller is motivated one of the owners needs to cash out now. I approached them about a second a while back and they said no they want just bank financing.
I guess I will just ask and see if they are interested, if not I will move on. It's a shame because the property has an almost 8k/month positive cash flow.
Thanks again!
We encourage you to stay in touch with the seller who wants out. Do not loose contact! Maybe you could offer a of 'trade interests' (His property for something else) Investigate if the partner is moving on to another piece of real estate. Maybe there is an opportunity to join forces and do another deal? Maybe you can obtain favorable financing or terms and consider a 'subject to' exchange?
We are just brainstorming with you!
Eric & Rosa