Would you buy a 4-unit apt building w. only 1bed units(Edgewater)

Question

An investor friend of mine offered to sell me his vacant four unit 1-bedroom building. All the tenants moved out and he fixed each unit up. He and his wife want to get out of the landlording business, and asked me if I'd like to buy it. I'd normally jump, but I've owned 1-bedroom units before, and granted, it wasn't Edgewater, NJ, but it was other areas which seemed hard to fill. the price is 1.2m for the four unit building as well

Henry Lazerow · Answer

I have sold over 30 million of 2-4 units and seen many patterns. 1brs in C class areas are awful you will have high turnover, vacancy, etc. But 1br in class A/B+ areas are great you get single professionals and professional couples who pay on time no issues and often pay rents very close to the price of 2brs. They also tend to be lower vacancy as less supply of 1brs other then the high end new construction 1brs which tend to be very pricey.

Sandra Andrews · Answer

I wouldn't be afraid of the fact that the building only has 1-bedroom units, assuming the location is good. If you are within walking distance to restaurants and shops, then 1 bedroom apartments are very attractive to young professionals. I have a few myself and I've found them to be very easy to lease.

Nathan Gesner · Answer

Income is $8,800 but expenses are $6,400. Assuming you've included setting aside funds for reserve, vacancy, maintenance, capex, taxes, insurance, etc., then I would say it's worth considering. That's positive cash flow of at least $200 per unit.

Nathan Gesner · Answer

What is the rent income? Expenses? What would it sell for on the open market? Too many questions.

Would you buy a 4-unit apt building w. only 1bed units(Edgewater)

Would you buy a 4-unit apt building w. only 1bed units(Edgewater)

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