Am I missing something on this $700,000 Property?
Hey guys,
I'm about to put a 20-unit property under contract, and would appreciate your insight.
The property consists of 20 units, fully rented in a C area. 15 people on waiting list. I viewed the property with the manager, and the units are nice. Most units bring in $400/mo; the few that have been renovated are pulling in $600/mo. So there appears to be a nice value-add opportunity here.
Asking, $750k, but appraised at $650k.
Income: $9,500/mo
Expenses: $2,900/mo (insurance, taxes, maintenance, property manager, etc)
Debt service: $2800/mo (20% down, 4% interest-rate, 30 yr)
Cash Flow: $3,800/mo
It's been operated like a mom-n-pop property, so we don't have rent rolls yet, but from what I have listed above, the numbers seem to work, even at asking.
This will have been our biggest investment so far (we have a quad and a couple SFR), but want to avoid any blunders. Please help.
Manny