When we buy a 24-unit in Tacoma, the property never hits the MLS. It never appears on LoopNet. There's no marketing flyer, no broker email blast, no rent roll circulating to twelve other buyers. The transaction goes directly between the seller and us, and most of our deals close that way.
\nSellers ask why. The honest answer is that for the kind of properties we buy, listing is usually the worse option for the seller, not just for us.
\nAn off-market sale is one where the property never goes through a public marketing process. There is no listing photo shoot. No broker open. No competing bid stack. The seller and buyer talk directly, agree on price and terms, and close.
\nThat sounds simple. It isn't. It only works when both sides know what they're doing.
\nFor the buyer, off-market means accepting that you're forming a price without comparable evidence to anchor it. You can't say "the broker has it priced at X." You have to underwrite the property cold and back yourself. We've done it a couple of dozen times across Washington, Texas, and Kansas, so we have a reference point. A first-time buyer doesn't.
\nFor the seller, off-market means trusting that the buyer is who they say they are. Capital, underwriting capability, track record. The whole arrangement falls apart if the buyer turns out to be a wholesaler trying to find someone to flip the contract to. The off-market pillar page covers how we differentiate from wholesalers in detail.
\nSellers sometimes ask if they should list with a broker first and let us bid in the same process. Three reasons we usually push back.
\nFirst, brokers cost roughly 5% on a multifamily transaction. On a $1.2M Tacoma fourplex that's $60,000. On a 24-unit at $4M that's $200,000. The broker does real work for that fee. Whether the work is worth the price is the seller's call. For the small-to-mid-size assets we buy, it usually isn't.
\nSecond, listing puts your tenants and your rent roll on the open market. Twelve buyers walk through the units. Property managers learn the building is for sale. Tenants find out from the property manager and start asking questions. If the deal falls through (about a third do at this size), you've created six months of disturbance for nothing.
\nThird, the seller-financing structures we use don't fit a broker's process. A broker is paid at closing, in cash, full commission. If the seller carries a five-year note at 7%, the broker still wants their 5% upfront. That math doesn't work for either side. We can structure a deal where the headline price is higher because we're paying the seller over time, but only if we're talking directly. The seller financing page walks through the structures.
\nThe shape of one of our typical transactions:
\nWe've closed in 14 days when both sides moved fast. We've taken 45 days when financing structures were complex. We've never taken 90+ days, because by that point either party has lost interest.
\nSometimes. Not always.
\nOff-market transactions don't have the price-discovery mechanism a competitive listing creates. A listed property might attract a buyer who pays above what the rent roll supports, because they have a strategic reason or a 1031 exchange deadline. We don't bid that way. We pay what the building underwrites to.
\nSo yes, on the upside, listing might find you a buyer willing to pay $50,000 over what we'd offer.
\nThe trade-off: that listing process takes 90 to 180 days, costs 5% in commission, exposes tenants to the open market, and has roughly a 30% chance of failing. If you net it all out, the spread between an off-market direct sale and a successful listing is often inside the broker fee, sometimes under it.
\nFor owners who care more about a clean exit on a known timeline than a marginal price uplift, off-market wins.
\nWe buy 5-to-50-unit multifamily, generally B/C class, generally post-1960s vintage, in Washington, Texas, and Kansas. Buildings with real value-add components: under-rented in-place tenants, deferred maintenance we can underwrite, capex we can plan for. The Sell pillar page covers the criteria in detail. The state pages, Washington, Texas, and Kansas, go deeper on submarkets.
\nIf you have a property that fits, the next step is short. Call or email me directly. The first 15 minutes tells us whether there's a deal here. The full process, from that first call to the wire on the closing date, runs 14 to 45 days.
\nIf you'd rather understand the financial structures we use first, the seller financing page has the math behind owner-carry deals, including the IRC 453 installment-sale tax mechanic.
\nThe thing we won't do is pretend an off-market sale is right for everyone. If your property is already under contract with a broker, we're not the right buyer. If you want maximum price discovery and you're willing to absorb the cost in time and tenant disturbance, list it. If you want a clean, predictable exit on terms you control, that's where we come in.
\n", "summary": "Off-market multifamily deals are private transactions between a seller and a buyer with no broker, no MLS, no marketing flyer. They work when the buyer has real capital and underwriting capability and the seller wants a clean exit on a controlled timeline. Most of our acquisitions in Washington, Texas, and Kansas close that way.", "date_published": "2026-05-10T00:00:00.000Z", "date_modified": "2026-05-10T00:00:00.000Z", "tags": ["off-market", "selling-multifamily", "direct-sale"], "_kallpa": { "topic": "off-market", "audiences": ["seller", "experienced-operator"], "contentType": "article", "keyTakeaways": ["Off-market means no MLS, no broker open, no marketing flyer. Seller and buyer talk directly and close in 14 to 45 days.", "It only works when the buyer has cash, an underwriting model, and a closing track record. Wholesalers don't count.", "Listing on the MLS costs roughly 5% commission, exposes tenants and rent rolls to twelve buyers, and fails about a third of the time at this size.", "Listed deals occasionally find a strategic buyer paying above underwriting. The price uplift is often inside the broker fee.", "Off-market wins for owners who value a predictable exit on terms they control over the chance of a marginal price uplift."] } }, { "id": "https://kallpaproperties.com/learning-center/how-we-underwrite-a-5-to-50-unit-multifamily-deal-in-30-minutes/", "url": "https://kallpaproperties.com/learning-center/how-we-underwrite-a-5-to-50-unit-multifamily-deal-in-30-minutes/", "title": "How we underwrite a 5-to-50-unit multifamily deal in 30 minutes", "content_html": "When a seller calls about a property, we can usually tell whether there's a deal within half an hour of getting the basics. Address, unit count, current rents. That's most of what we need.
\nUnderwriting at this size isn't complicated. The math is the math. What matters is being honest about the inputs, especially the ones brokers consistently soft-pedal.
\nThis is how we do it.
\nThree things, in order:
\nWe can underwrite without the T-12 if you don't have one. We just plug in our own operating expense ratios and adjust later. We can't underwrite without the rent roll.
\nStart with gross potential rent. That's what the building would collect at full occupancy at current rents. Multiply monthly rent roll by 12.
\nSubtract:
\nThat gives you effective gross income (EGI). The number we actually expect to collect.
\nWe don't trust "scheduled rent" as a number. If a unit shows $1,800 on the rent roll but the tenant has been paying $1,500 for two years on a verbal arrangement, the rent is $1,500. We'll find that out in due diligence, so we underwrite it that way from the start.
\nThis is where most pro formas lie.
\nHonest operating expense ratios for B/C class multifamily in our markets:
\nTotal operating expenses for B/C class in our underwriting usually land between 38% and 48% of EGI. Brokers commonly show 28% to 32%. The gap is either understated repairs, missing reserves, or outright fiction.
\nEGI minus operating expenses equals net operating income (NOI). The most important number on the page. The glossary entry on NOI walks through it in more detail.
\nBuildings need roofs, HVAC, water heaters, paint, flooring, parking lot resurfacing, plumbing repairs. They need this whether you collect rent or not. A 1972 building that hasn't had work in fifteen years is going to need $20,000 to $40,000 per unit over the next decade.
\nWe reserve $300 to $500 per unit per year for ongoing capex, on top of routine maintenance. Pre-1970 buildings or known deferred-maintenance situations: more.
\nSubtract capex reserves from NOI. That's the cash flow we actually plan around. The capex reserve glossary entry explains the logic.
\nCap rate is NOI divided by purchase price. Brokers will tell you the cap rate of a listing using their inflated NOI. We compute it using our underwritten NOI, which is usually 15-30% lower.
\nSo a deal a broker calls a "6.5% cap" lands in our model as a 5.0% cap. That's not a rounding error. It's the difference between a deal that pencils and a deal that doesn't.
\nWhen we make an offer, the cap rate target depends on the market:
\nThe glossary entry on cap rate covers the framework.
\nIf the deal is going to be financed, NOI minus debt service equals cash flow. Lenders usually want a debt service coverage ratio (DSCR) of at least 1.20 for stabilized properties, 1.30+ for value-add.
\nFor seller-financed deals, the math is simpler. The seller financing page covers how we structure those. The seller becomes the bank, the property is the collateral, monthly payments come from operating cash flow.
\nPutting it together, this is what runs through Jose's head when a seller is on the phone:
\nSix steps. Most of the time we can do this on a yellow pad while the seller describes the property. If the numbers work, we send a written offer in a few business days. If they don't, we say so on the same call.
\nIf you want to walk through your own property's numbers, tell me about it. Even if we don't end up buying, you'll get an honest read on what it's worth. To see what we look for in each market, the Washington, Texas, and Kansas pages cover submarkets, criteria, and recent activity.
\n", "summary": "When a seller calls about a property, we can usually tell whether there's a deal in 30 minutes. Address, unit count, current rents. The math is rent roll minus realistic vacancy minus true operating expenses minus capex reserve, divided by a market-appropriate cap rate. Brokers pad each line. We don't.", "date_published": "2026-05-09T00:00:00.000Z", "date_modified": "2026-05-09T00:00:00.000Z", "tags": ["underwriting", "multifamily", "cap-rate", "operating-expenses", "capex"], "_kallpa": { "topic": "underwriting", "audiences": ["seller", "new-investor"], "contentType": "article", "keyTakeaways": ["Three inputs decide the offer: current rent roll, T-12 operating statements, and unit count and vintage.", "Operating expenses for B/C class multifamily land between 38% and 48% of EGI. Brokers commonly show 28% to 32%. The gap is usually fiction.", "Capex reserves are the line most pro formas skip. We reserve $300 to $500 per unit per year on top of routine maintenance.", "Cap rate targets vary: Tacoma stabilized B-class around 5.5 to 6.0%, Wichita value-add 7.0 to 8.5%, Houston B/C class in the middle.", "If the numbers work in 30 minutes, we send a written offer in a few business days. If they don't, we say so on the same call."] } }, { "id": "https://kallpaproperties.com/learning-center/seller-financing-math-wichita-16-unit-example/", "url": "https://kallpaproperties.com/learning-center/seller-financing-math-wichita-16-unit-example/", "title": "Seller financing math: a real Wichita 16-unit example", "content_html": "I get this question constantly: "If I sell to you with seller financing, what does the math actually look like?"
\nBetter than walking through it abstractly, here's a representative example based on the kind of Wichita acquisitions we underwrite. The numbers are illustrative, not from a specific transaction. The mechanics are real.
\nThis is illustrative math, not tax advice. Talk to your CPA before structuring any actual sale.
\nThe property:
\nThe seller's two choices:
\nSale proceeds: $900,000.\nAdjusted basis: $150,000.\nGain on sale: $750,000.
\nThat gain breaks into two pieces under IRS rules:
\nTotal federal tax on a cash sale: roughly $156,000 to $182,000, all due in the year of sale.
\nNet to seller after federal tax (state varies): roughly $720,000 to $745,000.
\nSame $900,000 price. Same $750,000 gain. The mechanics change because of IRC Section 453, the installment-sale rules.
\nDown payment: $200,000.\nNote: $700,000 over 10 years at 7% interest, monthly P&I payments.
\nWhat changes for taxes:
\nYear one tax bill in the seller-financed version: depreciation recapture ($62,500) plus the small amount of capital gain on the down payment plus tax on year-one interest income.
\nCompared to the all-at-once cash version, year one tax in the seller-financed version is roughly $70,000 to $90,000, instead of $156,000 to $182,000. The other $80,000 to $100,000 spreads across years 2 through 10.
\nThat's the appeal: the seller stretches gain recognition over a decade, smoothing tax exposure into brackets they may control more cleanly, while collecting 7% interest on the carried portion.
\nOn a $700,000 note at 7% over 120 months, monthly P&I is roughly $8,130. That's about $97,560 per year. Over the full 10 years that's $975,560 in payments on the note, of which $700,000 is principal repayment and $275,560 is interest income.
\nAdd the $200,000 down payment.
\nTotal received over 10 years: $1,175,560.
\nTotal in the cash-sale version: $900,000 received at closing.
\nThe seller-financed version pays out $275,560 more in nominal dollars, against time-value-of-money and credit risk on the note. Worth it for many owners. Not worth it for owners who want a clean exit and to redeploy the capital fast.
\nThree to be honest about.
\nDefault risk. If the buyer stops paying, the seller forecloses and gets the property back. We've never defaulted on a note we've issued, and the property is the collateral, worth more than the unpaid balance, but the seller still goes through the legal process to take it back.
\nInterest-rate risk. The seller is locked in at 7% for 10 years. If market rates rise, the note is worth less in current-value terms. If market rates fall, the seller wins.
\nInflation risk. Fixed-rate dollars in year 10 buy less than year-one dollars. A 7% note in a 4% inflation environment yields a real return of 3%, not 7%. Reasonable returns, not stunning ones.
\nIt's a good fit when:
\nIt's the wrong fit when:
\nIf you want to talk through how this would work for your specific situation, reach me directly. To read more about what we buy in Kansas, the Wichita market page covers our submarket focus, and the Kansas state page covers Kansas City and the rest of our Kansas activity.
\nFor the broader framework, the seller financing pillar page walks through subject-to, wraparound, and full-payoff structures.
\n", "summary": "Selling a multifamily property for cash recognizes the full gain in year one. Carrying the financing under IRC Section 453 spreads capital gains across the note term, smooths bracket exposure, and adds 7% interest income on the carried balance. This walks through the trade-offs on a representative Wichita 16-unit.", "date_published": "2026-05-08T00:00:00.000Z", "date_modified": "2026-05-08T00:00:00.000Z", "tags": ["seller-financing", "irc-453", "installment-sale", "wichita", "tax-strategy"], "_kallpa": { "topic": "seller-financing", "audiences": ["seller"], "contentType": "article", "keyTakeaways": ["On a $900,000 sale with $750,000 of gain, a cash sale triggers roughly $156,000 to $182,000 in federal tax in year one.", "A seller-financed sale defers most capital-gains recognition across the note term. Depreciation recapture is still recognized in year one regardless of structure.", "On a $700,000 note at 7% over 10 years, the seller collects roughly $97,560 per year, totaling $1,175,560 across the note plus $200,000 down payment.", "Seller financing fits owners with no near-term liquidity needs and no 1031 exchange in motion.", "This is illustrative math, not tax advice. Talk to your CPA before structuring any actual sale."] } }, { "id": "https://kallpaproperties.com/learning-center/selling-rental-after-tenant-stops-paying-rent-washington/", "url": "https://kallpaproperties.com/learning-center/selling-rental-after-tenant-stops-paying-rent-washington/", "title": "Selling a Rental After a Tenant Stops Paying Rent in Washington", "content_html": "When a tenant stops paying rent in Washington, everything changes. Cash flow disappears, stress builds, and the clock starts ticking. Many landlords in Pierce, Snohomish, Kitsap, and South King County find themselves wondering if it's even worth holding onto the property anymore.
\nIf you're stuck in this situation, you have more options than you think. This guide walks you through the realistic paths available to Washington landlords who want to sell, exit cleanly, and avoid dragging out the problem for months.
\nWashington has one of the most tenant-protective environments in the country. The eviction process is slower than in many states and requires precise compliance.
\nKey realities:
\nThis makes many landlords decide that selling, even with a non-paying tenant, is a better option.
\nThis is the classic path, but it comes with drawbacks:
\nThis option works best if your property is in excellent condition and located in a strong sub-market like Tacoma's North End or Everett's Silver Lake corridor.
\nMore landlords are choosing this route because it removes the legal burden from them.
\nInvestors who know the eviction process will:
\nThis avoids court delays, uncertainty, and stress. The trade-off is a lower price compared to a fully vacant, market-ready duplex or triplex, but the speed and simplicity make up for it for many owners.
\n"Cash for keys" sounds unpleasant, but it often resolves the situation faster than eviction.
\nBenefits:
\nIf you're planning to list on the MLS or sell to a private investor, regaining an empty unit increases options significantly.
\nThis path removes nearly every barrier:
\nInvestors will buy properties in Tacoma, Puyallup, Federal Way, Bremerton, Everett, and Marysville even when rent hasn't been collected for months.
\nThis is often the least stressful exit for landlords nearing the end of their patience.
\nTo improve your outcome:
\nBuyers aren't deterred by non-paying tenants, they're deterred by lack of clarity.
\nA non-paying tenant doesn't mean you're trapped. Washington landlords sell properties in this situation every week. If you want a clean, predictable exit, consider which of these paths matches your financial and emotional goals.
\nIf you want help evaluating your options, I'll give you an honest assessment based on your property and sub-market. Reach me by phone or email, or tell me about the property here.
\nIf you'd rather read about the structures we use, see how seller financing works or what an off-market direct sale really means. If you're in another part of Washington, the Washington landing page has more on submarkets and what we buy.
\n", "summary": "When a tenant stops paying rent in Washington, you have four realistic exit paths: finish the eviction then sell, sell with the tenant still in place, offer cash-for-keys and then sell, or sell as-is to a private investor. Each has trade-offs in price, timeline, and stress.", "date_published": "2025-11-15T00:00:00.000Z", "date_modified": "2025-11-15T00:00:00.000Z", "tags": ["washington", "eviction", "non-paying-tenants", "selling-multifamily"], "_kallpa": { "topic": "landlord-playbook", "audiences": ["seller", "experienced-operator"], "contentType": "article", "keyTakeaways": ["Washington's eviction process is slow and tenant-protective. A 14-day pay-or-vacate notice is the floor, and physical removal still requires the sheriff.", "You don't have to finish the eviction before selling. Investors who handle multifamily routinely buy with non-paying tenants in place.", "Cash-for-keys often resolves faster than court and gives you a cleaner sale timeline.", "An as-is sale to a private investor removes repairs, showings, and contingencies, at the cost of a lower headline price.", "Buyers aren't deterred by non-paying tenants. They're deterred by lack of clarity. Document everything."] } } ] }