Here you go- I must be STUPID or something 2%-50% rule...

[Rich Weese]

I've been negotiating for 6 months on an extremely nice "class c" property in Dallas area. We're finally going to close on the 14th of Aug. According to those that believe the 2%-50%, I must be stupid, but I'm surviving!!
Actual #'s . 154 units with good mix and # of buildings. No chiller system. Tenants pay all utilities. Over 91% occ for last 3 years. Same owner and mgmt for 7 years.
Price is $4.1 million with 1.3 down and 2.8 loan at 6.5% 25 yr(I have no verifiable income so rate and term not great!! I show no taxable income). Will refi inside a year.
2007-$919K inc. 501K exp.418K noi
2008-$921K inc 503K exp and same 418K noi.
2009-465K for 6 mos and 92% occ.projected noi of 429K.

According to the 2%, I'm low. According to the 50%, I'm high. It must be a bad deal! I believe it is almost a 10 cap, with NO deferred maint( new roofs, a/cs and other goodies.
With my loan, I'll show a little over a 15% cash on cash! This is with the same mgmt onsite, and the same prof mgmt company. I'm pretty happy with this turnkey investment and like the return- even though it is a "failure" on the 2-50 stuff. Maybe , if I try really, really hard, I'll be able to get the occ up to 95% and then it may be a "good deal " as per the 2-50 crap.
I thought I should share an actual deal with the board and let you shoot me down. I'm still pretty happy with it. Rich.

p.s. I'll furnish more info on a self- storage facility I'm buying in FL. Current appraisal of 4.2 and purchase price of 2.710. I don't know if it will make the 2-50 crap- and I DON'T CARE.