Two historic properties in one deal. Total 13 units. Close to a well known university. Some units are current vacant.
Total yearly rental income: 139,440 (if fully occupied)
Total expense $60,000 (including tax, insurance, estimated repair of $13,000, utilities)
PM fee 7%: $9,700
5% vacancy: $7,000
Asking Price: $1,235,000
Owner claims the rent is below market value.
Should I pull the trigger?
without saying how you are financing... tough to really run #'s on that. All sellers claim rents are below market...
I would assume your Mortgage is in that 60k? What about Capex? If they are "historic" you might have $$$ expenses for repairs and maintenance too...
I would not pay $1.235M for an $11.6k/month rent roll. Not going to comment on vacancies, repairs, etc as I don't know the property. We'll assume your numbers are solid. If you're financing the property, let's assume 20% down, 5% over 20 years, your mortgage would be $6.5K/month. With a NOI of 63k, your monthly cash flow is nearly -$1,300.