First apartment deal!!! please help

4 Replies

Originally posted by @Robert Nelson :

Please click on my report above and let me know your thoughts on this deal 

Overall looks good. Here are my thoughts. Few items to consider.

Management fees because of the size in rents I assume its a large multi-family.

Closing costs don't even amount to 1% generally speaking 3-6% closing costs is the national average.

Rehab funds consideration because there is always something that comes up. Just saying.

Funding considerations: Very good rate if you have been able to secure this cudos. Prior experience with multifamily.

Originally posted by @Robert Nelson :

@Guifre Mora thank you for the feedback. My bank indicated 20% down 25 years @ 4.25% for a commercial loan.

I will be self managing.

How do you feel about the 5% for cap ex, repairs/maintenance and my vacancy?

Well, its all speculation, right?  5-7-10%  What's the age of the building? what kind of maintenance have the current owners performed? Did they maintain the building in good condition? Have they done heavy repairs, when? (Roof, Flooring, Plumbing, HVAC, Parking lot) 

When you analyze deals you should always go for the worst-case scenario. I've worked on so many deals and analyzed so many that it all falls apart during the due diligence period. I've seen deals for building from 1905 that generate amazing revenue with low expenses but we never knew until we got the expense report and P & L from the owners. On other occasions, everything looked great until there was zero documentation to validate the offering.