I currently have a 6-plex apartment complex (2 tri-plexes) in Las Vegas, NV under contract that I am wholesaling. Building is sold as-is, and needs some repairs. Each unit is approx. 750 sq. ft. 2 bed 1 bath with laundry hookup and community courtyard. 5 of the 6 units have been rehabbed with new A/C units and have current leases in place at $600/mo. Asking $385,000, must be able to close quickly. Contact me for additional information.
That would be like a 5% cap rate. I do not know the Las Vegas market, but that seems like a pretty low cap rate to me.
That's going to be a tough sell...
I am currently in negotiations with the seller to lower the purchase price pending a repair estimate, but I wanted to get it marketed ASAP. The ARV is roughly $420k. This is my first venture into the commercial market, can you explain to me @Russell Brazil what expenses you figured into coming to that cap rate? Thanks.
I just used an estimate of 50% of the gross rent for expenses. On commercial properties I think the best I've seen is 40%,and I've seen as high as 70% on some bad properties.
@Russell Brazil nailed it for you. I agree that 50% is the minimum you want to use as a general rule...personally, in Las Vegas, I use 60%
Would that include loan costs?
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing