Hello Bigger Pocket Members!
I'm currently looking for an money partner to provide the down payment on this property in exchange for 50% of the profits. The seller is asking for all offers by Saturday, April 4th. I realize that this is a tight time frame. This particular area in Chicago is very active and properties are moving quickly. In March alone 18 comparable properties sold. I'm posting the details I have at this time. The seller and his attorney will release additional financials (rent rolls, schedule K's, etc.) during the due diligence period.
Asking price- $495,000
6 units: (4) 1 bdrm/1 bath; (1) 3 bdrm/1 bath; (1) 2 bdrm/1 bath basement unit (the broker nor owner represent the legality of the basement unit)
Total bldg sq ft: 3,891
Built in 1920
3 stories
Gross monthly rental income- $4,925
Total annual income- $65,100
Total annual expenses- $17,847
NOI- $47,253. Cap is 9.54% *The cap for some other properties in the immediate area were around 7-8% cap.
Sq ft price- $127.22 per sq ft
If anyone is interested in a joint venture with me on this property, I'm happy to send the comps. Based on the comps, I think we could offer $475,000.
The listing agent said that building is in good condition but the units need cosmetic updating. The local realtor I'm working with had a chance to view the property yesterday. The current owner has owned the building since 1973. He's redone all the windows and the roof within the last 10 years. As stated above, the listing broker nor owner represent the legality of the basement unit. To duplex from the first floor into the basement would be a full rehab. The stairs are there but it would take some construction. If interested in proceeding we can get an estimate during the due diligence period. The roof has some cracks and would needs to be evaluated. There were two showers that had some tiles that were bowing out indicating water damage behind the tiles. The seller is willing to do the tile repair work himself but stated the rest of the property will be sold as-is.
The neighborhood the property is located in is primarily a working class residential neighborhood. The median household income is about $47,000. There is construction going on around the block. There have been a few remodels both residential and commercial in the immediate vicinity. There is also a church and school located on the next block. The property is generating income as-is but there is room to increase rents with the property remaining as-is. Per rental comps, 1 bdrm/1bath units are going for $850-$1100. We also have the option of updating the units. We can get a few estimate during the due diligence period if that's the route we decide to go.
I realize I'm working off of limited information at this point. I'm willing to submit an offer with an money partner based off the information I have today. I work with a great attorney in Chicago and we can write in the necessary contingencies to back out of the deal if the property is not as represented.
Thanks,
Jessica
