Commercial/Multifamily Value Add or Flip in Wilmington DE

[Mark Gallagher]

Assisting fellow investor who was lender and subsequently foreclosed on a 5300 SF commercial building in downtown Wilmington DE. 103 W 7th Street. First floor is 2 efficiency apartments (last known rents $800/each). 2nd and 3rd floors are unfinished, about 90% done. They could be commercial or residential. One is laid out to be a 5 bedroom. The 3rd floor was going to be office space. Rent should be about $1400 +/- for those 5 bedrooms or office space. There was recently some water damage (city turned water back on without authorization) that would need repair as well. 

Numbers could look like this:

Gross rents: $52,800

Taxes: $3562

Insurance: $2400

Vacancy 5%: $2640

Management 8%: $4224

R&M 5%: $2640

NOI: $37,334

8 Cap Value: $466,675

Seller looking to get $235,000, quick sale. 

Purchase price: $235,000

Reno: $75,000

All-in: $310,000

NOI: $37,334

Hold as 12 Cap or flip for $150K gross profit. 

I have no skin in the game. Just helping him out.