Buying my First Apartment Building

[Peter Torres]

Hello, My Name is Peter Torres, I'm so exited to join this community of successful Investor. I'm ready to Purchase my first apartment Building, but i'm terrified that I could make a mistake.Can you please give me an input on this deal?

Units 8 in McAllen TX

Price 525,000

Gross Income$ 69,200

Vacancies 5.91% (4,093)

Total Net Income $65,127

Expenses $19821 (30.43%) 

NOI $ 45,306

Debt Service $27,622

Cap 8.63%

Cash on Cash 12.25%

The Broker tells me that the property was remodeled completely and the expenses are low for that reason.

Please help out this "NEWBIE"

What should the Offer be? How Low should I Shoot for on the price?

Thanks

Peter Torres

[Cody L.]

Originally posted by @Peter Torres:

@Cody L. Thanks for your response. But should I believe that they operate at 30% of expenses? 

 Not going to tell you what to believe.  I know what I pay for various things so almost ignore seller provided financials.  Some financials supplied are laughably inaccurate in both directions. 

I tend to buy based on price per door and what I want to see in an area (and what I've paid) and price per rent ratios (also based on what I've seen traded / what I've paid).

So on a simple "how much are you paying for that rent roll" basis, that property is fine IMO.  Because that's what you're doing when you buy a property.  You're buying a rent roll.