Just Closed on a 6 unit apartment building in Las Vegas

46 Replies

The owner wanted to do a seller carry for 200k with a 8.5% interest rate and Sale it for 300k.

After a month of the seller bluffing about all the buyers they had we finally got it done. Here are the details of final terms:

Sold for 100k Cash
Seller has 30% interest up to 300k (100% vacancy will be a 450k value)
No Monthly payments

Things I will do in the next month to get 100% full

I am going to evicting all tenents
Put about 50k of repairs and upgrades
Interview for a property management company

Anthony- congrats on the deal. I hope this isn't your first property. There are a lot of danger signs ahead on this one. Here are a few.
1. Bldg with a bad reputation.
2. mgmt companies won't be excited.
3. convoluted financing situation
4. "about "50K" repairs sounds ike gues
5. need to evict ALL tenants
6. absentee owner

I hope you're able to overcome all these obstacles, but you'll EARN your money, imo. Good luck. Keep us all posted. Rich in FL
p.s. Is this in N Las Vegas? I'll be there next week. Want me to go by and check on it for you? Let me know.


Thanks for the suggestings

1. It looks like it has a bad history because the owner and the management is bad
2. I have a couple of management companies I will interview on Friday
3. There will be no loan
4. 50k is a educated guess with 10% inflation
5. I want my type of quality of tenents instead of section 8
6. My property management will handle day to day functions but I will go out there at least once a month. Vegas is a 2.5 hour drive from me.

This is my first commercial property but it fit my criteria

P.S. it is N of the Airport. And sure you can

Seller has 30% interest up to 300k (100% vacancy will be a 450k value)

How does that work? Do you mean if you sell for $300K or more the seller gets a $90K check? They get 30% of the net cash flow?


This is what the creative side of this business is all about.

Yes... you have your work cut out for you, and yes there are pitfalls along the way... but you go the owner to share in some of these risks.

Your job is to build the equity through upside management and then enjoy.

One question... when do you have to take the seller out of the deal and under what terms?

Keep us posted.


As Rich and my new friend Peter said, keep us posted. I'm interested in knowing how it goes down for you as you progress as well.

to help clarify your answer to Jon, you're stating that once you 're-sell' the property for a profit the seller will get 30% of the 'gross' profits with a limit of 300k? is that right?

If that is right, how will you assure that you will once you do and if you do get it to 100% occupancy that you will be able to sell it for 450k?

So, if you have to sell for less than about $215K, they would still get their cut ($65K) leaving you at break even? Are you forced to sell within 10 years?

What are the rents?

Anthony- Prove me wrong. I hope for that. I'm still nervous for you on this deal. You know it best. Make it work!!Rich.

I'm sorry Anthony, but I just have to reply. I was going to let it go, but this info is being read by a lot of newbies and they need to understand a couple things.
1.Units are going to be 100% vacant before they'll be 10%. (you said you're emptying them).
2. Your expenses will NOT be 27%.
3. Your NOI isn't close
4. Your reair estimate is a guess.
5. You have a partner with different goals

As I said. Prove me wrong. Come back and keep us posted. I've owned thousands of units and I stick to my original concerns. I'll try to not reply again, but your #'s are in question, imo.. Rich, just trying to keep it real.


At the risk of highjacking Anthony's thread and to the benefit of the newbies...

What do you believe the NOI would be?

I think it will be around 52% of income as I see high vacancies and turnover expenses... and unless the property manager is really good (and we know how that goes) I believe that maintenance will be a constant issue.



Peter- imo, NOI will be closer to 40 than 50 for the 1st 12 months. I know Vegas pretty well, and emptying out a building with an absentee owner/manager complicates the issue. Rich.

Rich... this is great insight...

So those new to this game what Rich is saying is that of the expenses to operate this building in the first year... not including the cost to perform deferred, required maintenance will be $34,560.00 and the NOI will be $23,000.00. Which doesn't do much for the value of the property.

Anthony, you have got your work cut out for you. What can all of us who jumped in do to help?


Because they are dirty tenents and they all live off of section 8. It's just not my type of tenents. I believe I can have more quaility tenents that will make my units a more desirable place to live.

I think I would keep some of the renters, try to raise the rents with HUD if possible.
This way you will have a guaranteed income while you are rehabbing individual units. In the meantime, you may be able to rehab some of your renters (get them to clean things up and satisfy your standards) I personally like section 8 because it is guaranteed and some of my best renters are section 8.

I was also wondering why the units are going to be emptied? I understand what you are say regarding section 8 tenants, however, I think that there can be quality section 8 housing. As a matter there is a great article in Multifamily Excutive magazine describing how affordable housing units are decreasing because more units are being torned down or phased out and not being replaced. Concluding that the lack of quality affordable housing units is the the "next" housing crisis. If you are into multifamily Multifamily Executive and Apartment Housing Finance are great FREE publications. I wish you the best on your deal.


I have been following your post and I want to give you a little professional advise also. First, your investment is business and not personal. Putting out the existing tenants when you do not have the necessary capital to reposition the property is dangerous. Who will secure or watch the property from vandalism? You can phase renovate the units and bring in new tenants as you complete. If you have section 8 tenants you have a guaranteed cash flow if you pass the HUD inspections. What will be your target tenant and projected rent? You need to set a repair budget and scope of work before starting. Don't just throw out a number of 50k. If that's all you have break down your budget to show how you plan to spend the 50k before you start. Management is key but if you don't have anyone to manage you are putting th cart before the horse. Have you written a proforma? Or calculated NOI etc? Desiring better tenants is good, but what is your location and what amenities do you offer? Again, keep it business and not personal and the numbers don't lie. I wish you well and I will be watching your progress. Keep your head up and keep adapting to change.

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