Multifamily property greater than 4 units - any tips?
My realtor brought me an 8 unit multifamily opp. I’m conducting my due diligence.
all currently rented for $850/mo. Taxes are $7200. Likely below market rents by $100-200/mo. No vacancies. Sale list price is $720k.
Building is 20 yrs. old. Inspection not yet completed. Hiring separate hvac person and will inspect hot water heaters, appliances, etc. likely will have a roofer inspect and will get a termite bond.
Commercial loan, 20% down, best available rate.
Other than backing out potential repair costs what do I need to know on multifamily to establish an offer? Is there a rule of thumb per door?
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What is the NOI for the building? Need list of all expenses, current contracts with vendors, rent roll, list of maintenance repairs for past 5 years, etc. there is lot of due diligence. Check with lenders to make sure 20% is ok. Most require a minimum of 25% down. The lender can provide you there requirements. Take a listen to the old capital podcast. It's a lenders podcast out of Texas very good information from a lenders perspective. They put out a white paper that describes the typical lender expectations on a commercial loan.