6 unit in North Georgia

[Bobby C.]

Hello BP,

This is my first time posting in the Analysis thread. I have the opportunity to purchase a 6 unit in Northern GA, about an hour north of Atlanta. I have been in talks with the seller and walked through a few units, gotten an appraisal and an inspection. Everyone seems to be leading me away from this, due to deferred maintenance issues. I also cannot get the seller to provide me with a Schedule E or his bank statements so that I can confirm the actual costs to run this multi. The owner is older, and bought the MF in 2007 for cash and has run it as a side project. He also owns some commercial and SFR’s in the area from what he has told me.

Anyways, I’ll let the numbers speak for themselves, this is my first MF and do not want to cloud my judgment with excitement. Please see below. All opinions are welcome!

Price- $239,000

Finance- Owner finance with 15% down ($36,000) 5% APR with 30 year Amortization with 7 year balloon

Monthly P&I + Tax and Ins- $1507

Gross rents- $2825 - $500 for 2/1 X5 units and $400 for 1/1 unit

Monthly Expenses- $430

Cost of repairs (Deferred Maint)- $15000 (high estimate)

Cost of upgrades to units- $15000 (high estimate)

Market rent- $650 for 2/1 and $500 for 1/1

Pro Forma Rent- $3750

[Steve Smith]

@Bobby C. You should see a Big red flag if the owner will not provide the requested information think twice before advancing