Flipper/Rehabber · Canton, OH · Member since 2019 · 26 posts · 10 votes
I’ve set up a business for buying homes and started running marketing with the expectation to get some small fix and flips/buy and holds going but had no idea I’d have something this large come to me. I was contacted earlier this morning by someone wanting to sell their 30 unit property. Asking $1.5m but I believe I could get it under contact for $1.3m. The problem is, I have $50k available currently with access to about $200k more. Has anyone else been in this situation and could shed some light on where I should take this deal or pull funding together? I’ll also leave the numbers down below. Thank you.
Numbers:
Property taxes: $18k/yr
$14,433/ mo : Current income with 7 vacancies
$19,026 : Fully occupied
$175,283/yr : current
$227,127/yr : fully occupied
$82,020: expenses (excluding prop mgmt)
$93,735 : NOI Current
$140,395: Fully occupied NOI
8% CAP RATE fully occupied. (Adjust for 10% vacancy and its a 6% CAP)
Alec - my suggestion is to connect with other locals at meetup groups and/or events (check out meetup.com) and have those contacts lined up even before evaluating a deal which will make this process (potential JV or equity raise) as well as your response back to the seller or broker much quicker. As they say "have your team in place" including lenders, equity partners/JVs, property managers, etc. All are equally important.