Anyone ever manage/test drive apartments with the intent of buying them

[Brandon Hicks]

I met with the sellers of a small apartment complex in the 10-20 unit range this morning. The NOI for 2012 was $10k below what their loan payments were for the year. I feel like I could negotiate a no-money down land contract if I could pay them a monthly amount that would just cover their payment. I also feel that I can manage this property far better than they have. The gross potential rent was about $67k and the actual collected rent last year was $49k. I feel I could bring the income up to around $65k or more. I think there would be a 6-12 month turnaround period where I would replacing tenants and raising some rents.

At one point the sellers asked if I would be interested in managing them. Has anyone ever taken on the management of a turn-around with the intention of buying them after the numbers improve. I feel like I can make a go of these.....I just don't like the idea of bleeding $10-12k or more during the turnaround!!

I don't like the idea of managing someone else's property so i'm open to any ideas and or advice.

[Jeff Greenberg]

The key is the MLO, but he expects you to pay after repaired value, then walk. Without a significant discount on the price, why waste your time. You can find other full priced deals without the hassle.

Our current deal cash flowed a fair amount with 10 down units (62 unit prop). 60 days after close we expect the units to be up and rented. 50k in repairs and 80k in increased cashflow 400k-600k increase in value and new equity.

Bottom line, buy at a discount. Don't buy based on the value after you put the work in. That is your gravy.