WOW, should I take this deal?!

You're looking at a current cap rate of 22%! You also have a value added opportunity - getting the tenants to pay for expenses, minus property mngmt. fee, mortgage (if any)... go for it.

It would be up around 26% or more if the other 4 were rented. Also gotta factor in mortgage if you can get somebody to do private $, or whatever exit strategy you have. Even if you get the tenants to pay utilities, the mortgage would takes its place anyway. As long as you have a good cap rate on any multifamily deal with other things, (around 10% average or more), you got it made.

You could probably L/O from seller (if possible), L/O to a end buyer, get a fee, sandwich the deal and come out pretty good. Or, you could wholesale it.

I have more knowledge in multi-fam than residential but it's all works out.

There could be other numbers to consider, but landlords wanna know if it's a cashcow, what the numbers have been for the last year or 2, location, cap rate (annual NOI divided by asking price), value added, and pictures help too.

Where did you find this deal, by the way?

Yeah the I actually included the mortgage in the expenses so that cash flow is with that factored in...

How much repair work is needed to turn the 4 vacant units?

I still need to find that out... It sounded like 10-12k for other repairs around the property all with GC quotes that are transferrable...

I own property up there and can tell you to take or break depending on area

i kind of want this one for myself or with a partner if we can get it...

I just emailed about that exact question. From pics it looked nice but again you never know. I sent you a pm about a few others I found as well...

I'm liking the deal, but the first thing that jumped out was the rent schedule. It does seem a little low. Are the utilities in the owners name? Can you pass off the utility expense to the renters? We are trying to do this in a 4 unit that we have but met with a road block because of existing leases, so we have to wait until each individual lease expires and then write new ones. But I like the deal man...Jan

congrats. sounds like a good possibility. thishousebuyer mentioned doing a L/O on the property, which is actually called an MLO or master L/O, but it sounds like your seller needs cash. MLO's are good if there is more money to be made because you would be paying the seller what he's all ready getting and as you increased the cash flow, that increase would be yours. anyway, hope it all works out for you.

I met with the owner yesterday and everything looks good. The books are very organized, I had about 25 questions I had for commercial that were sent to me that were all answered with no hesitation and the next step is to go look at it in Weds. Wish me luck!

Jan the utilities were just sub metered seperatly so that can now go to the tenants so that cuts out almost $800 per month out of the expenses. Also rent rates are a little low for the area so we have some room there. The average NOI is 28k for the last 6 years and is 34k over the last two years....

Is there any deferred maintenance? What's the cost of repair to get those up n running? From the looks of it, I say you have a killer deal. It's a cashcow as it is, and there are more upsides to this deal when the other vacants are ready to go. Roll with it, my friend.

The roof needs replaced as well as some decks in the back... Total there is about 25k worth of maintenece that needs to be done but those will not affect vacancy rates rather make rent prices go up...

I cannot wait to hear how well this worked out for you. I'm with Keb. I hope you get to keep it. Whoo hoo!
peace,

Sweet!! Let us know how the deal turns out! Very excited for you and keep up the good work!

I hope this deal works out for you Matt.

Steve.

Better deal then I thought... The 270k figure was just for the 10 unit complex, the three other buildings are valued at 230k more by themselves and that is without the 9 garages on the property that rake in another $300 a month that is also not included!

Assessed Value is over 500k and as it sits is worth around 300k with no repairs.

Oh yeah, I forgot! I sign contracts with the owner on Weds! I am going to try wholesaling it first but if not I already have the Private Money lined out if I can't get any takers...

That is an awesome deal you've got there!

Why do you want to try wholesaling it first?

Do you know what type of emergency the owner has encountered?

Can't wait to hear how it goes for you!

A deal in a million! Two questions: Why is the owner so anxious to close?
How did the owner arrive at LP of $110k when the property is worth $500K? Where are all of the other investors? It sounds like such a good deal (almost too good). You might want to add contingency for a thorough inspection, check for all EPA and Zoning issues, flood plain...everything!!! Its the things we take for granted that jumps up and bites us in the "ACE". (That spelling was meant for Trustpoint and Jimmy K.) Lol I hope this works out for you as planned...just be careful my brother.

RENO

Alright, my GC and I are heading out in the morning. There are a few other investors for tomorrow but we will be the first to see it and she is bringing contracts with her to sign tomorrow. She is needing the money to invest in a health clinic in Denver and needs the cash fast. She needs to close by the end of Feb because she needs to show the bank in order to get the loan that she has all the available cash as possible. If it doesn't close by then she is keeping it!

Trust me there are investors all over the place trying to see this and some where scheduled for today but cancelled due to weather. I plan on locking it up tomorrow when I see it...

Keep ya posted!

like it is too good to be true. Just make sure you put your contingency clauses in the contract so you can do your inspections and title search. But sometimes you just find a great deal; I hope this is one of them. Good luck on locking it up as this might be a home run.

Hi Matt,

Just curious if you locked up this deal? Sounds like a good one and wishing you the best of luck!

- Tom

Hi Matt,

How did things go on your deal? Very interesting thread of comments on the property. I hope you are doing well.

Matt,

did you ever get this deal done? did you post about it?

wishing you success,

valerie