I think I have all the pieces and don’t know how to put them together due to complete newness in investing in apartments. There is still more due diligence to be done but here are the preliminary figures.
46 Unit Apartment
Gross Income Potential: $314,500
Effective Gross Income (w/7% vacancy): $292,500
Expenses: $120,000
NOI: $172,500
Cap Rate: 8%
Seller is older investor looking to start selling off properties and retire. He doesn’t have them on the market at all but would sell the property if he could get his price. He agreed to sell the property for 1.7M
I have five individuals who I have planted the seed with about this property and all of them are willing and able to purchase a property of this size if the deal is right. They will all qualify for financing and some could pay cash if they really wanted to.
Using those figures I valued the property to be around $2,150,000.00 (which could be off, like I said “I am new to this”)
How can I position myself on this deal?
I was thinking about getting an option to purchase the property from the seller and somehow using that to make some money on the deal. If I do it this way, I don’t know how I can show the property to my investors without them talking with the current owner and price coming up. I don’t have a brokers license but know one, would I be breaking the law in Tennessee?
I am hoping to offer the end buyer a final price of 1,950,000 (10% discount of value) and make the difference.
Any advise on how to work this would be appreciated.