Houston Multi-Family Expenses

6 Replies

Hi all - I'm looking at a 25 unit property in Houston.  It's in foreclosure and due to be sold in Sept.  I'm trying to run numbers through the Rental Properties Calculator  but I don't have enough information or knowledge to fill in all the expense items.  I was wondering if you all could help me come up with reasonable averages for this type of property - in Houston in particular???

25 units build in 1971.  Supposed to have had new roof done this year.  

I need the following

Cap rate
Water
Sewer
Electric - has laundry
Garbage
Insurance
Other

Vacancy %
% towards repairs and maintenance
% towards cap x
% prop mgt fee

Thanks!

Keith

Hi keith, unfortunately I don't have the expertise in the area of multi-family to direct you. Sorry. I'm sure someone on bp does. Try the multi -family forum. Just text in the topic. In no time you'll get a response. Best wishes.

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A very dirty generalization and rule of thumb is at least a 50% expense ratio, and with this being a C class property probably in need of renovations you can conservatively underwrite this with a 55-60% expense ratio.  This is of course before you pay for your debt service.

Again, this is a very rough estimate, but it will at least get you started. 

Eric is correct that you can expect to run 55-60% in expenses. I am very active in the TX market and just closed an $8.5MM project in Houston. I'd be happy to share with you some figures to help guide you on what the expenses should be. Send me an email and I'll reply with the data.

Did you buy these? We have others if you want

@vennessamc

I'm looking for MFH in phoenix area. I'm still learning everything i can about mfh and would like to purchase something in next few months. Let me know if you can across anything.  Thx

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