I have an accepted offer on a funky 5 unit. 1 SFR and a 4 studio apartment building in Washington state, non-conforming lot, grandfathered in. Fully rented right now. I tried to be conservative with numbers.
rents - 2450 gross.
vacancy 15% - 2082
utilities - 600
maintenence @3%/year - 262
prop tax - 100
insurance - 75
prop management - 166
landscaping - 80
NOI - 848 / m
I have access to flexible non-traditional funding, which I think has been an issue for this property. Sort of a weird property, needs commercial financing, but very small loan (so high costs comparatively) and most commercial buyers are looking for larger purchases, plus non-conforming, so appraisers won't give value all the properties.
Units are not individually metered for any of the utilities, which I am going to look into, the water bills are through the roof right now.
Seeing the property tomorrow.
My husband and I seem to gravitate toward funky - the more unique the better. But, we also had to walk away when they got too funky in some cases. Your funky deal seems intriguing, especially if you have the means to overcome the financing struggles. Looking to when you sell eventually, would you be able to offer seller financing to remove that obstacle for the next buyer? Have you looked at the water bills? While our small units can vary $20-30 a month on usage, most of the cost is fixed sewer and garbage. If you split it, any chance the total bill will go up? I'd get inside, talk to the tenants, and see what your gut tells you.
This property is worth looking into further. The numbers look good depending on the funding you can acquire. See what it costs for separate meters. Kind of a high vacancy rate, so be sure this won't be a problem.
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