125 SFH Portfolio Acquisition
BPers,
I have read several posts here and intend on re-listening to a podcast or so that touched on this topic; HOWEVER, there are some lingering questions. My background is in commercial, so.....
Why can I not treat this like a B/C class MHP or Multifamily? NOI/CAP = Purchase Price? Ive spend some time underwriting this and it hit me that I was "trying to hard". Any of you experts know why I could not treat it like this?
Deal:
125 SFHs
95 rented, 30 vacant
Avg rent: $661, Gross: $747,912
Vacancy: 12% (Total Guess)
Taxes & Insurance: 15.8% (I have actuals)
Repairs & Maintenance: 12%
Lawncare for Vacants: 1%
Management: 9.2%
Operating Expenses: 50% (coincidence) ; ($373,956)
CAP X: 6% or ($45K) (I believe this to be too low)
Estimated NOI: 328,956
8 cap
Purchase Price: $4,111,950.00
Obviously there are a few areas that need confirmation, but I feel like treating this similar to a CRE deal is justified. No?
Thanks in advance.