Real Estate Deal Analysis & Advice

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Jordan Vires
  • Investor
  • London, KY
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25% expenses on Multi Family

Jordan Vires
  • Investor
  • London, KY
Posted Jun 25 2014, 05:51

Do any multi families actually operate with only 25% expenses in relation to gross rents. I made an offer on a multifamily property and used 50% rule as a guideline. The realtor's response was.....

" Vacancy rate, is less than 10%. Most of the time there is a waiting list and vacancies are filled as soon as the unit is cleaned and or painted if needed. As far as expenses he said 25% was a huge amount ti figure so not sure where we go from here, we seem to be do far apart."

Should I stand firm on 50% ? I thought I should. However they act like this is some special situation where even 25% expenses is high. Anyone ran into anything like this? I figured they are are stating this to justify asking price that is way too high!!

Thanks

Jordan

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