Off-market 8 plex Georgia Deal Analysis

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Off-market 8 plex Georgia Deal Analysis

Byron Scott
Rental Property Investor · Villa Rica, GA · Member since 2014 · 220 posts · 360 votes

I usually look into small multifamily. I need help analyzing this 8plex built in 1996. Roof looks good vinyl siding looks good. All utilities are separated. Current rent is $650. Market rent is $800. Owner lives far away and property is managed from a distance. What can I do to make this deal work? How much do you all think I should offer? Thanks!

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Account Closed
Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
6y

@Byron Scott could be a deal.  Questions I would have are. 

1.  Can you get 30 year financing on this property?  I would expect a 25 year with a 5/7/10 year balloon. 

2.  How much rehab, if any, do you need to put into it to get it to 800?  Or is it just blatantly under market?. If a rehab how much do you anticipate it costing?

3.  What’s the current tenant base?  SSI, service workers, students, section 8, other??

4.  What’s the market rate for per unit sales?  At 510k it’s 63,750 a door.  Can you negotiate it down to 55-60k a door?

5.  It’s a newer property so is there central air and city utilities?  

On the surface it looks like it could be a deal but again I don’t see all the numbers.  What other costs are there?  Trash dumpster?  Parking lot lights?  Lawncare more then likely. 


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  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    6y

    A few things. I would leave a higher buffer for repairs, 10K-20K just in case. After inspections that can change but initially i'd have a buffer. What did you have for vacancy and maintenance? The net for each unit is $117 per month, seems slim margins. $150 net per unit would leave a better cushion. Is this a B area?

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  • Byron Scott
    OP
    Rental Property Investor · Villa Rica, GA · Member since 2014 · 220 posts · 360 votes
    6y

    Thanks for the response and good information. It is one street over from a college with 15,000 students on campus. I would say B- street but definitely in the path of progression. 8.3% vacancy and 7.5 repairs and 7.5 cap X. Its not an old place and is good pretty good condition. I've talked with some of the tenants there and have pictures of the inside. 

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  • Michael Y.
    Rental Property Investor · New York, NY · Member since 2020 · 11 posts · 2 votes
    6y

    One of the statements that is always made is "A good deal is made on the purchase"

    Have you thought about purchasing the property below the market value? That will increase your returns to get your cash on cash into the double digits. 

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  • Account Closed
    Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
    6y

    @Byron Scott could be a deal.  Questions I would have are. 

    1.  Can you get 30 year financing on this property?  I would expect a 25 year with a 5/7/10 year balloon. 

    2.  How much rehab, if any, do you need to put into it to get it to 800?  Or is it just blatantly under market?. If a rehab how much do you anticipate it costing?

    3.  What’s the current tenant base?  SSI, service workers, students, section 8, other??

    4.  What’s the market rate for per unit sales?  At 510k it’s 63,750 a door.  Can you negotiate it down to 55-60k a door?

    5.  It’s a newer property so is there central air and city utilities?  

    On the surface it looks like it could be a deal but again I don’t see all the numbers.  What other costs are there?  Trash dumpster?  Parking lot lights?  Lawncare more then likely. 


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  • Byron Scott
    OP
    Rental Property Investor · Villa Rica, GA · Member since 2014 · 220 posts · 360 votes
    6y

    Thanks for bringing those things up Eric. I have really only been analyzing small multifamily. I'm house hacking one right now and saving up money for my next property. I have just been trying to wholesale or find properties and add value to other investors. So I have been cold calling. This is a deal that I ended up pitching to 2 buyers and both were interested. I didn't know if it was worth pitching at that price because I didn't know how to analyze +5 unit real estate deals. Those are all great points and things I will look for when calling owners and any future deals I run across. 

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