Thoughts on this Deal?

4 Replies

I have come across a 5 unit apartment complex in a college town  off the market currently. 

Owner is trying to sell since he is older and looking to retire. 

100% occupied with leases through December of 2018

-Purchase price: $105,000

-Monthly rent: $2250

-Annual Tax: $1154($96.00monthly)

-Annual Insurance: $ 1275( $106 monthly) 

-Property Management : 8% $180.00 monthly

-Rents are currently about 10% below market value. 

-Each unit Separately metered so no utilities

-Renovated in 2016. 

-Cap Ex budget -$ 200 a monthly 

What am I missing and am I the only one thinking this deal is a steal? 

based on those numbers it would pass my initial test. I would make a decision quick if I were you, if he puts it on the market at that price I would imagine you would have some competition. I would cover myself by making the offer contingent on property inspection.

@Jacob A.
I would make an offer contingent upon an inspection and see how much work the place needs and also confirm it is zoned to be 5 units

Can you do a quick title search? No one likes surprise liens.

This will also help you determine if a college town multi-uit is zoned properly like @Chris Seveney mentioned

@Jacob A. . Initial numbers look like a very good deal indeed. I would act on it fast and definitely before it hits the market. Of course property inspection shouldn't reveal any major issues.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here