In this first‑person narrative, the speaker recounts a multi‑stage real‑estate transaction that began with a $4 million auction bid for a 94‑unit property. After doubting the valuation and walking away, the broker later offered the chance to assume the seller’s existing 4% 20‑year note of $3.1 million. Although the bank initially refused to allow an assumption, it quickly reversed its stance. The speaker’s due‑diligence team documented extensive deferred maintenance, prompting the bank to require an additional $1.3 million financing package, which included a $1 million line of credit for rehabilitation. The deal closed with the speaker assuming the $3.1 million note and securing the rehab line, illustrating how patience, perseverance, and off‑market opportunities can yield lucrative financing structures.
Chapters
I'm gonna go for $4 million. And here's what happened. Went to auction, guess what? Winning bid was $4 million. Called the broker, or the broker called, said, hey man, you should have taken this deal, man, this is gonna be sweet. I said, there's no way that property's worth $4 million. I've walked it, I've seen it, I wouldn't let my worst enemy live there. He said, well, we got a buyer. I said, you got an out-of-state buyer, bought it sight unseen based upon your false information of numbers. When you look at those OINs on the auctions, those numbers are bad, trust me. Take whatever they post, cut it in half and say that's probably pretty close. But I these numbers are bad, you're going to be calling me. So long story short, 45 days later I got a call. I said, yeah, that deal fell out. Are you interested? I said, I'm too fine. He said, I can't do 2.5. I said, so we talked with 2.7. Can't do 2.7, but the seller needs out. So we walked away. 7 months later, the broker calls me back and says, hey, we got to move this property. Are you still interested? I said, tell me what would make me interested. He said, well, they've talked to the bank. It's on a 4% 20-year note. And they'll let you— the seller believes they'll let you assume it. Now that's interesting, that's appealing. It's 94 units. So what's the balance? $3.1 million. Okay, so what are we, $30,000 in the door, give or take, in Longview? $70,000, $80,000 valuation and all the comps around, 4% interest rate. Kind of like it. So I called the bank, said, hey, so-and-so's looking to sell, we understand that you're going to let us assume it. Oh no, this is a credit union. We don't let anybody assume. We've never done it, not going to do it. Sorry, you can get a loan, but we're not going to do it. So all right, call somebody back, said, hey, bank said they're not, let's assume it, I'm out. I got a call within an hour from the bank saying we'll let you assume the note. Kid you not, that is a true story. We did our due diligence, sent a third-party company after that, said I want you to go through every unit, take all the pictures you can. Two weeks later they came back with over 200 pictures. Of crap. I mean embarrassing stuff. I sent it to the bank, said, hey, we finalized our due diligence, I wanted you to see this. And I was more pissed at the seller, so I was kind of slamming him a little bit. The bank called, said, so are you gonna walk from the deal? No, but here's what I do need. I need another $1.3 million. Done. That quick, that easy. So not only did we assume a $3.1 million, 94-unit, at 4%, 20-year note but they gave me a line of credit of $1 million for moving rehab. That's the kind of deals that are out there. These are the kind of deals you can be doing. Patience, perseverance wins every time. Every time. They're out there. They're off market. But here's the deal.
