4 Unit

3 Replies

Hello BP!

Come across a deal I would like some unbiased opinion on.

Property is for sale by owner and has yet to be marketed except to me and a select few others.

Property is in a B location.

Price- 160k

3 of the 4 apartments are renovated and rented at $550 a month.  4th apt has been gutted and drywall complete, needs trim, paint, countertops, etc.  all 4 units are 2/1 with central heat and air, off street parking, small balconies, individual w/d hook ups in the basement.  Building is brick with 2 common areas one in front and back.

Numbers as of now:

NOI- 20100

Taxes- 3000

Insurance- 1200

Refuse- 60 a mo

Municipal- 60 a mo

Casg flow- 204 a mo

Cap rate- 9.8

DSCR- 1.19

GRM- 8

10k invested to finish apartment and do some other maintenace/landscaping etc.  

Safe assumable numbers after repairs:

NOI- 31200

Taxes- 3000

Insurance- 1200

Refuse- 60 a mo

Municipal- 60 a mo

Cash flow- 1129 a mo

Cap rate- 16.7

DSCR- 2.03

GRM- 5.1

These numbers all assume a 0% down scenario, as I'll be using equity from another property for the downpayment at the same interest rate as the loan.  I believe I can possibly talk this deal into seller financing with 10-15% down.  

What's your thoughts?? Any ideas on the best way to bring him to the table with the best possible financing?

Thanks in advance!

I am assuming you are the PM? You may still want to budget that in, whatever that percentage is (10%)? Also, what about capex, monthly repair budget, lawn maintenance? 

how is cash flow going up $900 if rent of vacant unit is only $550?  Utilities that high?

@Dan Henning

I apologize for that.  After repairs etc.  rents would be raised to 750ea for all the units.  That's why the cash flow goes up so much.

@Douglass Belt Once all repairs are made and rents are raised to standards I would save an additional $100 per door for repairs etc.

As for PM I run all of my properties myself as of now.

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