Real Estate Investor · Macomb Township , MI · Member since 2017 · 19 posts · 0 votes
I’ve been presented a off-market opportunity 8 unit multi family building in Clawson,MI. The rental roll revenue for 2015 was $51,040 and 2016 was $52,274. The NOI for 2015 was $33,322 and 2016 was $29,313. The owner replaced the roof in 2016.
Also, what are the most beneficial loan options for small multifamily buildings?
$350,000 / 8 = $43,500/unit. Is that typical for apartments in that part of the Detroit metro?
Expenses seem to be averaging about 43% of rents received. Seems a bit low, but probably self-managed. Make sure to plug in 10% for third-party management in case something happens to you and you can't manage it yourself.
Actual received rents average $545. What are the "asking" rents? That will show the effective vacancy rate.
What are competing rents in the area for those size units? (on Zillow and Padmapper, for example)
What is the HUD Fair Market Rent for the Detroit Metro? If you wanted Section 8 tenants, what does the local housing authority say they would pay?
$350,000 / 8 = $43,500/unit. Is that typical for apartments in that part of the Detroit metro?
Expenses seem to be averaging about 43% of rents received. Seems a bit low, but probably self-managed. Make sure to plug in 10% for third-party management in case something happens to you and you can't manage it yourself.
Actual received rents average $545. What are the "asking" rents? That will show the effective vacancy rate.
What are competing rents in the area for those size units? (on Zillow and Padmapper, for example)
What is the HUD Fair Market Rent for the Detroit Metro? If you wanted Section 8 tenants, what does the local housing authority say they would pay?
@Marshall Zakarian - I think the price is high as compared to other opportunities specially if you are putting this much of cash upfront. If you get good financing options then may be. Have you looked at the sale history of the property ?
@Marshall Zakarian - I think the price is high as compared to other opportunities specially if you are putting this much of cash upfront. If you get good financing options then may be. Have you looked at the sale history of the property ?
Yes, Seller purchased it in 2009 for $250,000 and has invested about $40,000 in renovations.
Hmm - As I said, do a bit of research and wait. Attend local meetups and may be spend like 60 days before you make the first deal and have analyzed over 50 deals.
I agree with Haseeb, The more deals you analyze the better you become at analyzing a deal that fits your needs. I would also look at the expenses very carefully to see what you can reduce. Value add plays a big part in multi families. Also make sure that a Starbucks Chick-fil-A or Barnes & Noble's is close by.