Help me analyze this deal - is it any good?

5 Replies

@Scott Garrels Why do you have legal,supplies,and advertising for expenses? Most of those would be under PM, which should be 10% or more. Your capex numbers are low. plex with 1000 sf per unit = 4000 sf. Flooring 4000 sf @ $6 sf = $24000 / 8 year life span / 12 months in a year = $250 per month on flooring capex. Need to account for roof,appliances,hot water heater,hvac,painting,cabinets,etc. I use 23% for vacancy,repairs,and capex. 

Thank you Amanda for you reply.

Tim, thank you for your reply also.  I will try to answer your questions below.

The reason supplies, advertising, legal is because those expenses were specifically called out in the Pro-forma I received from the owners.  That is also part of the reason PM is lower.  I agree that capex is a concern as well.  I will validate that assumption more closely.  Thanks again for your insights here on this potential deal.

@Scott Garrels tag people that you want to thank or if you have any follow up questions, Use the @ sign and start typing their name. Several names will appear. Double click their name it will populate the comment box in blue and they are notified.

Proforma is pie in the sky. Better to ask for t-12 and copies of the schedule e. Review the leases and if you get it under contract get an estoppel certificate from the tenants before closing.