I am sure this maybe a small venture for must but i am hopeful in getting some advice on this Comercial deal..
It has 6 one BR apartments and 2 store fronts. Each unit has its own electric ht/hw, so tenants pay their own utilities. In a downtown area, however its a depressed area with high substance abuse in the city. However i do believe things will turn around eventually.
The buy in for 50 percent ownership is 50K.
The property is almost fully rented however i am concerned with who the tenants are..
Property could use somewhere around 20k of work..
The property was recently listed at 400k for 6 months but did not sell.
Rents are $600 including the store fronts per month..
My concerns are no parking..
Rough part of downtown.. but i still like tje location.
Does this sound like a good by in?
The balance of the mortgage is 320k...
The owner seems to have purchased way over value at 450k a few years back..
I part of the partnership would be me doing most of the property mgm.
The mortgage financing is already in place and at a great rate.
First, Do you know what the vacancy rate has been historically? Do you have the rent roll?
no i do not know the vacancy rate i am familar with the area and own a couple smaller properties. No also on the rent rolls that would also be reviewed. With all things good.. the property would bring in 6000 per month.. i am estimating 2000 operating cost not including mortgage payment.
The mortgage is close to 2000 a month however.
Split with partner i and thinking i can take home on average 1000-1500 per month.
You need to learn more about the nature of this kind of property. Expenses are more than you estimate, turnovers cost you more, non payment is usually an issue, etc. That is why the margin looks so high. This is not the type of property you want to go to school on. Property management is difficult.
I know the NOI looks great but it can be elusive. These properties should sell for 25-30,000 per door or lower from what I think the area is from your simple description.
thanks great insight. It being downtown and close to a hospital makes it appetizing but it is a depressed area