what do you think about this deal?
I have an opportunity to purchase a 20 unit building. Price reduced from 235k to 200k for a quick close. Needs about 100-200k in rehab.
Selling by owner
Building is vacant
Zoning – Commercial residential
Asking Price 200K-Clean title
Cap rate of around 33%
Lot Size 88x60
Public parking in front of the building
Repair estimate 100 to 200k
Loans are available from lenders
15,000 Square feet plus 5000 Square feet in the basement
$2,500 in property tax a year
Each unit has its own electric and water meter
1 bedroom apartments – 16
2 bedroom apartments – 4
Previous rent roll on 1 to 2 bedroom is $550 to $700
Potential cash flow of around $130k+ annually
$14k in annual operating expenses / Sewer $50 per unit which comes out to $1000 per month. Non-occupied units are $25 a month. Management fees average around $12%.
Occupancy is expected to be very high through the use of government programs* Rent is paid directly to the owner*
Owner has 6 tenants standing by with interest on these units****
Please help me decide how to go about this deal? I feel I could offer less due to the cost of repair. Need help on how to finance as well.