Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
Please analyze these property:
60 units in 5 buildings, 24 one bed / 1 bath, 36 two bed / 1 bath. Ask price $875k, 92% occupied.
Income and expenses you can find in the excel file http://www.a-l-a-g.com/realestate/crest.xls, this is the property cashflow analyser from biggerpockets. All expenses actual (August 2009) the income is with 15% vacancy.
Last appraisal was 2008 in October for $1,2 million.
New windows in all buildings.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
On the contrary, the red tape is an opportunity! As it scares Mr Investor away, so too will it to others placing you and a cash offer in a nice position.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Questions needing answers to in order to properly give a value and opinion on the deal:
What is the actaul current occupancy?
What is the condition of the property?
What are the per door rental rates?
$445 for the 1 beds and $485 for the 2 beds - is that an accuarte assumption?
Gross potential rental income = $337,800
The expenses listed appear to be low due to the fact that the owner is responsible for some or all of the utilities.
48% would be close if it was all tenant paid utilities.
Assuming 85% occupancy currently, your AGI = $287,130
Less 50% OE = NOI of $$143,565 (16 cap at the $875 ask price) That is pretty good, but again, the utilities, condition of property, and area could make all the difference in this being a great deal, a good deal, or a bad one.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
Hello,
92% occupancy today, all separated (heat and electric), Laundry facilities in each building, house is in good shape, needed no maintenance today, I forgot, there are 40 garages in the back of the buildings plus plenty of parking, rents between $430-$450 (one bed) and $460-$495 (two bed)
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Are you thinking of buying it to hold, to flip or what is your interest in this property?
So to clarify, all utilities except water are paid by tenants? My rental rates per door appear to have been right on, have you seen the actual monthly water bill? The OE showed $30k annually, $2500 monthly, is that accurate?
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
I prefered buy and hold, permanent income is the best I think.
Okay, Okay :), I go to details :
Utilities subdivides in $2,880 Gas, $6,904 Electric, $26,897 Water and Sewer, Telefone $1,186 and (I feel abashed) I forgot Trash Removal $4,457. So the expenses now $166,023 and the NOI $123,907. I saw the water bill from July 2009, with 88% occupancy.
October 2008, at the appraisal date, was the occupancy 68%. The buildings become filled up as you see. The area is North Ohio, there are many good Multi Familys for sale in Ohio, but this one is one of the best what I could find..
J Scott gave me the determine of value for cash flowing investment propertys: Price = NOI / Cap Rate, NOI $124k / 7,5% Cap Rate (surrounded area) = $930k property value, the ask price ($875k) in this way is correct. The County Auditor page says the same, value $934k. Otherwise two Multi Family Properties were be sold in surrounded area, one 34 unit for $1,2 million and one 20 unit for $850k. But this was class B apartments, this propertie is class C+.
I´m a property manager, so I can drop the property management costs to zero, this is a plus of $15k each year.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
The property itself has a cap rate of 14%, without the management costs 16%. But the avarage cap rate for Multi Familys in this Ohio area is 7,5% according to valuation system and the appraiser takes these system for the appraisal. J Scott informed me so.
With a cap rate of 14% the value is $1,7 million.
What next?
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
Okay,
Today I found out what the catch is! After my aggressively inquire I received following statement now:
"The property is available, but it is in receivership. The bank is willing to take a reduced amount, especially if it is cash, but we need to get the property out of the control of the court. Right now, any offer would have to be approved by the court. The owner and the bank are working on an arrangement for the owner to deed the property to the bank at which time the court appointed receiver will be done. Until then, any offer would need to be approved by the court."
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
On the contrary, the red tape is an opportunity! As it scares Mr Investor away, so too will it to others placing you and a cash offer in a nice position.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
I see the same opportunity, all run away, no one has interest. Needs only three things time (have enough), patience (enough) and cash money (unfortunately, here is the problem for me).
Please advice me, what is a receivership in the US? I don´t know.
On monday I talk directly with the owner, my main questions are begin with: how and what.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
Hello Norm,
Yes I read your post, but after the statement from the broker of the seller, I will play safe now.
Please forgive me, Monday I talk to the Owner, then I give you the answers.
Are you interested on the red tape deal?
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
Spoke with the broker today, the court bother the owner, but I can´t get a read. I´m too distant from Ohio, yet the owner will send me a full report to my hands.
Now my question do the interested parties. When I share my knowledge with you and provide the address and the contacts.
What guarantee can you give me, be in on it?
Send me a mail or a PM or answer here, your choice. Thank you.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
NCNDA
Non circumvent non disclosure agreement signed would protect you Uwe but not fully. I suggest you speak to an attorney in regards to your legal concerns and for your own protection.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
I come back :D :
The red tapes goes away. I spoke with the owner of the building and he will be working out his problem with the IRS soon and he feel comfortable that he can proceed. Time table is 30 - 50 days now.
I be in a key position now, fortunate coincidence for me. The seller and his broker have no other interested parties. The red tapes put everyone to rout.
I bring home the message: I live in Germany, so I don´t know any attorney in the US and I haven´t enough cash for a significant down payment, much less a cash offer.
If you get on board with this deal, so I will trust you. I conceive an idea of partnership. We can negotiate, but a finders fee is to few.
If anyone has interest in this property, so send me a email or PM please. For normal questions or suggestions you can post here, but most details you found in this topic.
Flipper/Rehabber · cincinnati, OH · Member since 2009 · 211 posts · 59 votes
17y
Uwe,
We have bought several paroperties out od receivership in Ohio..it is not bad at all..just has to run through the court system for approval and that takes time..most receivership properties are decent opportunities here in Cincy.