Two 4 Plex Purchase Options..
I am looking at a single building seperated by a demising wall into 2 4 plexes, totaling 8 units. The 7 existing tenants are mostly LONG term... 5-20 years. The owner/manager of 25 years wants to do a 1031 and start towards retiring to the west coast. I'm racking my brain on ways options to make this most attractive for us both.
Purchase price: $360000
Monthly income: $3200 ($400 x 8)
Monthly HOA: $360 (Trash, lawn, parking, snow, pool)
The cash flow is slim, but the rents are well below market, but with solid tenants. The property is paid off, so the owner is getting no interest deductions or depreciation.
I'd like to lock up the place without having to deal with his listing agent (which he's agreeable to). The contract with the listing agent is for another 4 months. What would be a good mutually beneficial plan of attack?
Rent the entire building from him for 6 months and take over management? How could I protect myself and my investment into the property during this period.
Any opinions? How about this?
Purchase price $350,000.
$5000 down.
Lease for 12 months for $2500 with 100% of lease payments going towards downpayment.
I take over management and HOA.
How would a deal like this be structured to protect me?