Bardonia, NY · Member since 2017 · 4 posts · 1 vote
I am looking at a property (garden apartments) with 20 units, 100% rented. Gross rental income annually is $174,000. The annual expenses are listed as $71,400.
The apartments were built between 2000-2005.
I was wondering if any of you have any ideas about this investment opportunity.
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
8y
1. "The area is very quiet and rural".
2. "20 units, 100% rented".
I would have thought these two statements don't normally appear together.
My next question: what does $50k get you nearby, if you were looking for a single small home instead?
(But that may be an unfair comparison, depending on the value of the 100 acres of vacant land included with this).
You wrote: "Annual expenses are about $72,000 per year. That includes electricity, maintenance, insurance, water, taxes, management". That figure looks low to me. Have you verified? eg. Have you got proof of annual property Tax?
Getting 1.45%/m gross rent is GREAT for some areas, but NOT great for other areas. Which is it, there? My 2c...
Grand Forks, ND · Member since 2017 · 21 posts · 59 votes
8y
Hey Mike Albani it's so hard to judge if a deal is good or not on this little information. Put a little more into it. Good neighborhood? Are the expenses high? How do rents compare to others around you? Etc...
Good luck
Bardonia, NY · Member since 2017 · 4 posts · 1 vote
8y
Thank you @Kelly Byrd and @Cole Johnson. The complex is a mix of 1, 2, and 3 bedrooms. It has a 100 acres of developable area. It includes a leasing office and a maintenance shop. The area is very quiet and rural. The rents are 700, 750, and 800, totaling $14,550 per month. Annual expenses are about $72,000 per year. That includes electricity, maintenance, insurance, water, taxes, management.
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
8y
1. "The area is very quiet and rural".
2. "20 units, 100% rented".
I would have thought these two statements don't normally appear together.
My next question: what does $50k get you nearby, if you were looking for a single small home instead?
(But that may be an unfair comparison, depending on the value of the 100 acres of vacant land included with this).
You wrote: "Annual expenses are about $72,000 per year. That includes electricity, maintenance, insurance, water, taxes, management". That figure looks low to me. Have you verified? eg. Have you got proof of annual property Tax?
Getting 1.45%/m gross rent is GREAT for some areas, but NOT great for other areas. Which is it, there? My 2c...
Rental Property Investor · Los Alamos, CA · Member since 2016 · 114 posts · 62 votes
8y
@Mike Albani: So what I would do is run this thru the Bigger Pocket calculator for buy-n-hold. If there are numbers the calculator is asking for but you don't have, find out what they are, or decide on a reasonable substitute you can use. Those expenses sound low to me, but I don't know the area. The 100 acres may give you a way to force some appreciation, depending on local zoning regulations and such. Do you have an idea of what you would do with it?
You could always make an offer contingent on due diligence, verifying financials, neighborhood, zoning, etc. Then when you dig into the property if you find something you can't make work, use that contingency to back out of the deal. It's not bullet proof, you could end up in a fight over your earnest money, but it does get you under contract and able to start analyzing the actual records of the property and hopefully it all checks out and you'll close!