It's in Lowry Park North. I'm not sure it's a great area for investment, but that's why I'm here. I've heard once you stay west of the 275 or the opposite side of sulphur springs your fine. Does anyone have experience in this area. Does this seem like a good/decent deal?
It's a 9 unit studio building. They are asking 550k. Each unit rents for 750 per month; total $6,650 monthly. All utilites paid for by tenant. Building was built in 1981.
@Jaysen Medhurst I have not been able to get a realtor give me a solid answer. I've heard as low as 5 and as high as 9% for cap rate. For Capex I have that at 8% for Maintenance.
In regards to utilities, thats what was given to me on the financials.
What about trash? 9 apartments are going to generate at least a 4 yard dumpster every two weeks.
Vacancy does seem low. Studios tend to turn over even faster than 1 bedroom apartments at my places. It doesn't mean you can't rent them quickly but it does mean a LOT of tenant searching.
I'll echo @Jaysen Medhurst on the management, I'd go at least 8%.
Do you have any outside lights? You probably need to account for at least $30-50 per month in utilities, most of which will be common lighting.
I don't see any numbers for the sewer and water bill(s). I doubt there are 9 different accounts with the city at this place. That is the bill that may break this deal at that price point. Up here I would expect to pay about $150-175 per month for 9 adults.
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y
@Raymond Rashid, as far as cap rate, you can't go on what you "hear." Talk with other commercial brokers and, importantly, commercial loan officers.
Secondly, and this is of utmost importance, you can not analyze a property based on "what was given to me." You must to your own due diligence and underwriting. Confirm numbers that are give you for insurance, taxes, etc. Use your own numbers for everything that you can.