Buy and hold play, strong rents with value add potential.

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  • Carl Millsap
    Investor · Midwest · Member since 2019 · 337 posts · 226 votes
    6y

    @Kevin Merlander Looking at the deal:

    1. Can you get the current owner to do the repairs or provide you the $5k allowance to do them?

    2. What is the value add? How much will it increase rent? How long will it take to recover the cost of adding that value?

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  • Kevin Merlander
    OP
    Real Estate Agent · Denver Colorado · Member since 2019 · 7 posts · 1 vote
    6y

    @Carl Millsap Hey Carl, I did ask the seller for the 5k in the form of seller concessions.  In this market we are seeing an increase in rents at 3-6% (conservatively). Cash on cash return came to about 20%, I am a realtor so I would use commissions.  The issue here is the building is primarily investors so there are a lot of tenants. The building is sound, but its quite an eyesore, so I am concerned with any special assessments coming up in the future. 

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