We have recently drummed up a potential deal in Eastern NC on an 18 unit apartment complex. There are three buildings with 6 units each, all are 2 bedroom 1 bath. Property is located in a B+ area and apartments could use an update from their current C+ appeal. Definitely some value add opportunity on this deal. This will be our first “existing” multi-family deal and just wanted some pointers from anyone that has gone into a similar deal.
Rental rates $800
All of the units are individually metered on all utilities.
We plan to pursue financing via a commercial 5 year balloon loan amortized at 20 years.
This puts us in a good cash flow position but wanted to just put it out there to see if anyone had some experience they would like to share. Thanks all
@James Johner Congrats on the find. Study the rents in the area. Landlords get tired and lose interest in squeezing maximum revenue out of their investment-it happens. Study the rents in nearby buildings; go look at them and see some units and what they rent for. Definitely, if improving the outside and redoing the units gets you a substantial return and better tenants; do it. It is important to not over-improve; there is only so much more rent a new tenant will pay. Paint and flooring and a good cleanup can go a long way. All the best.
This sounds like a good opportunity based on your description. It would be worth a second look at the financing to ensure you have the best cash flow strategy in place. Happy to help if you’re interested.