Updated 27 days ago on . Most recent reply
Thoughts on a 9 unit deal
I'm looking at a 9 unit deal in California. It's two buildings. First unit is a 4 plex all 2 bed 1 bath with coin op laundry room, Second unit is a 5 plex with 4 - 2/1 units and fifth is a 1/1 with coin op laundry. Owner pays water, trash and hot water about $21k in 2025.
2025 collected rent was $136k three of the units are way under priced, one tenet has been in place for 37 years!!! Market rent would be about $3700 a month more than collected now.
What is this worth?
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The family angle changes everything on the negotiation side, for better and worse. Better because you'll probably get honest financials and first shot at the deal. Worse because if something goes sideways with the property it's sitting at the Thanksgiving table with you.
Knowing the 37-year tenant doubles as the handyman is actually a bigger deal than the below-market rent. When he eventually leaves, you're not just losing rent and doing a make-ready on that unit, you're also losing your on-site maintenance. Factor in the cost of replacing that function when you model the turnover.
20 years managing SFRs is solid. Coin-op laundry and shared utilities add operational complexity you might not have dealt with on houses, but you'll figure that part out.
On calculators, I've never found one that captures a deal like this well. Too many moving pieces with the staggered rent raises and the long-tenured turnover. I'd build a simple year-by-year spreadsheet that tracks in-place income against projected income after each unit turns, alongside actual expenses. That way you can model the 3-4 year rent raise path and see what the cash flow looks like at each stage instead of just the endpoint.