Deal Analysis: 22 Unit multi-family
Good evening guys and gals,
I have a deal under verbal agreement at the moment until all the details are hammered out and I need some of your thoughts on it. This would be my first multifamily deal
Details of the property below;
- Number of Buildings: 11 buildings, plus 5 empty lots (potentially build more units in the future)
- Number of Units: 22 units
- Agreed Purchase Price: $132,000 CASH
- Repair Cost: $120,000 - $140,000 (**contractor priced repairs of each unit at $10,000-$11,000 per building - includes labor and materials**)
- Current Rent per Unit: $350/unit
- Gross Scheduled Monthly Rent: $7,700
- Gross Scheduled Yearly Rental Income: $92,400
- Current Vacancy: 87% (Only 3 of the 22 units currently occupied)
- After Repairs
- Rent per Unit: $425 - $450
- Gross Scheduled Rent Income: $112,200
- Operating Expenses: $33,660 (garbage $2,000/year, electrical cost $200/year, water and gas on individual meters)
- Net Operating Income: $78,540
- Cap Rate: 9%
- **part of the repairs would be to convert all units from gas to all electric.
Plan and Exit-Strategy
Plan is to finance the property with a hard-money loan (purchase and repairs). Value of property after repairs and 95% occupancy will be roughly $872,000. Exit Strategy would be Cash Out Refinance the property 12 months from purchase date.
Please offer any thoughts or advice or questions on this deal that would help me. I have attached pictures as well so you can see the condition.
