Just spoke with the owner's agent.
It's being sold to fund another business they want to get into, so no chance of owner carry.
There are 4 other offers on the table right now, apparently it's been advertised through some other channels that I didn't know about. apparently they have been trying to sell it for 1.5 years, but the realtor kept deflecting when I asked what has kept it on the market for so long. It was initially listed at 330K,two years ago... but relisted 1.5 years ago for 279,000. He did say the owner would not consider any offers until they have satisfied the requirement for a 1031 exchange. I cannot inspect the property until after they've accepted an offer.
I'm not sure what to make of this... on one hand, it may have been on the market for so long because the terms for financing a unit are onerous enough to keep amateurs away, while not being a big enough project to bring in those with the means. It may also be that he's accepted offers before, and people withdrew once they inspected it since there are things wrong with it.
I'm thinking at this point, I need to talk to my investor friend, and see what he thinks. If I can get him interested at a lower purchase price, AND the property is still available, maybe I'll make an offer then contingent on an inspection.
Is it reasonable to ask the seller to see maintenance expense records? I'd be able to get a good idea of how much he has or hasn't done on the unit and it's operating costs, recurring problems, etc. I did get some pics emailed to me, the unit looks dated, but in good condition. some paint and newer flooring would make a huge difference.
Even as the units are, I could reasonably increase rents to a total of $2900 a month. With updates, 3200 seem reasonable based on comps around the area.
If I offered $250,000, even with $2800 rent, here's where I'm at with $10,000 down.
-Maint, Prop tax, Insurance, Management, Vacancy is $13750/year.
-Debt Service, P&I, are $16353
-Net: ~3500/yr
A 30% return on equity. does not include cash flow bonus of depreciation.