41 unit apartment complex, HELP!

[Cody F.]

We just closed the deal on a 41 unit apartment complex. We got a great deal, but it's rough, really rough. Can someone help us with advice on how to get this thing running right? We have 32/41 rented with an average rent of 400 dollars per month. Should be 12800 income Our expenses are approximately 10k a month on average -3300 for mortgage -900 for insurance -3500-4000 for utilities (water and sewer are provided by us) and we have on site laundry that costs us 1400 dollars included in those utilities. -1000 to the resident manager -500 to maintenance guy -600 taxes Our issue right now is that the previous landlords let the tenants slide on rent sometimes. Now approximately 20/32 of the current tenants pay late or only pay part of their rent. We are hoping to get at least 8k rental income this month (09/2018) Our plan is to get pay or vacate notices up right away, and proceed with evictions and turning over the units right away to get the rental income back up to where it should be. We also have 3 new tenants moving in this month. And we have 4 units move in ready that will hopefully be occupied by next month. We are playing it close because we only have 11k in the business checking account and 9k in the savings account to run the business. What would you do? Any advice is greatly appreciated!

[Damon Pendleton]

Congratulations on closing the deal. You sound like you have a decent enough plan but you’re undercapitlized. I’m not trying to be that ******* but you have to plan for this with this type of property. 

With that said, let tenants know there’s new management who will enforce the rules. I suspect your numbers will get worse before they get better so prepare for that too. Make sure you’re able to turn over the units once you evict. Is this a reposition play?