Investor · Greencastle, PA · Member since 2016 · 67 posts · 24 votes
I'm looking to make an offer on my first deal. It's a 4 unit building with each unit having 1 BR / 1 BA. The analysis is below. The rent is a bit below market right now but all 4 units are occupied.
The house is listed at 170K but it's been on the market for a while and the agent thinks they will go much lower. 130K seems to be the numbers that will work for me.
Investor · San ramon, CA · Member since 2011 · 145 posts · 33 votes
10y
Hi Robert,
How does the cap rate compare to the market? Based on your analysis, have you had a chance to walk the units and check for any deferred maintenance? If it does have a bit of deferred maintenance, that's a negotiating point to reduce the price. Also, if there is an opportunity to increase rents then that could improve your numbers and make this a better deal.
I'd be interested in learning the seller's motivation and to know more on why it has been on the market for awhile?
In terms of expenses, has everything been taken into consideration - such as accounting, advertising, insurance, janitorial service, lawn, snow, licenses, legal, misc, management, repairs and maintenance, supplies, taxes, trash removal, utilities (gas, sewer, water, electricity, fuel oil, telephone), etc.? I see some of these items were accounted for in the analysis.
I did not see any management fees, so I take it that you'll be managing the property yourself.
As it stands now, the expenses seem a bit high relative to rents, so the goal would be to increase rents and adjust the offer price accordingly.