Need help on analysis of 43 unit complex!
Hi there!
I'm a Realtor in my area and had this 43 unit apartment complex pop-up as a new listing today. It is listed with the language "WELL BUILT BRICK 43-UNIT APARTMENT COMPLEX WEST OF DOWNTOWN YPSILANTI. 31 1BR UNITS & 12 2BR UNITS. THE GOOD - SPACIOUS UNITS AND NEWER ROOFS, WINDOWS AND BOILERS. THE BAD - PROPERTY NEEDS TLC, MISC REPAIRS, AND LEASING OF VACANT UNITS. PRICE REFLECTS $50K CREDIT FOR VACANCIES AND $100K FOR NEEDED REPAIRS. GREAT OPPORTUNITY. PACKET WITH PROFORMA AT LISTING OFFICE. "
I have not visited this property yet. I've never been involved in a large commercial unit like this and so I wouldn't be familiar with managing such a large complex and not familiar with what the best way to put the financing together (cash purchase w/other investors, finance, etc). I've been using Jon from 123flip.com's Analysis sheet on properties and the property seems to cash-flow quite well no matter how you structure it. I'm happy to post some numbers or whatever anyone would need to see to help me get my mind around it.
Currently they show:
Annual Rent: $272,400 for 43 units and ($245,160 currently)
Annual Expenses: $164,419 (includes taxes/insurance/management/maintenance/water/utilities)
NOI: $80,741
If you purchase for list price of $650k (7% 30 amortization and 25% down) and (hate to assume but) if they are correct in needing $100k of updating/fixes and you run at 8% vacancy rate than you end up with around $60k year in the positive... I also increased the taxes on that estimate considerably to take into account the change in ownership/taxable value.
Just looking for some thoughts here. I could come up with a pretty good sum of money to put into the down payment of this complex but it seems as though structuring the deal to bring in some cash heavy partners would offer them a GREAT rate of return and much higher leverage for myself (the CREATOR of deals!!!!)
Thoughts? :idea: