Deal Analysis

6 Replies

Thoughts on the below?

5 Units

1 duplex - Two  2/1's

1 duplex - Two 1/1's

1 SFR - manufactured gutted with additions so that it looks like house on inside and out.

1+ acres

9% cap rate

The numbers work and can work. Would you be scared of the SFR being manufactured as long as the numbers work? The purchase price is $250K.


Thoughts?

If these are all on one parcel, I'd be concerned about the ability to finance it.  Even if you buy via seller carry or cash, have to think about your eventual sale someday.  

What kind of gross rents are we talking about @William Ellis ?

@Steve Vaughan

The gross income would be $550 on the 2bd and $450 on the 1 bd...

The SFR would be at $10000

The bank is willing... 

I mean 1000 per month on the SFR

$450x2 + $550x2 + $1000, correct?  So $3,000 per month gross?  What all utilities are owner-paid?  Water & Sewer & garbage I presume?

As long as the property taxes aren't Texas high, my rough estimate is it will pencil nicely.  I have a couple oddish ducks like this and like them.   

Banks don't normally play with modified mfg homes, especially if not on foundations.  But it this bank will finance you, they may another down the line, right?

I like it @William Ellis . Provided the COC isn't below 150% of your CAP, I'd be inclined to buy it!

@Steve Vaughan  utilities are paid by owner and then billed to clients at the moment but they are all metered individually... All expenses should be between 30 and 40% including vacancy, etc...these are higher than seeker is claiming... I understand the pie in the sky routine most sellers give when they give their numbers.

Rates are good now so it will cash flow better than it may when rates would go up... My loan would be fully ammortized... No balloon or floating rates...

So you don't even have the normal balloons or calls or adjustable rates of a standard commercial loan with this 5-unit?   Extra sweet @William Ellis !

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