I’ve located what I think has the potential to be a lucrative multifamily opportunity. The apartment complex is 140 units. It was foreclosed on in February. The previous owner literally ran the property into the ground. it needs approximately $1,000,000 in repairs and updates to be brought up to a B+ and the current occupancy is only 30% - mainly because of condition of property. Property is on the market for $2.5M, which equates to about $18,000 per unit. But the listing agent has told me that the sellers will entertain any offer of at least $2M. The ARV of subject property is $4.5 - $4.9M. An adjacent property across the street is comparable in age and amenities and consistently operates at 90 - 100% occupancy and sold for approximately $39,000 per unit. There is tremendous upside potential for a buyer.
My goal is to flip this property with back to back closings but I’ve become a bit bogged down with the details of putting this all together. I am a real estate broker and will disclose to the listing broker my intentions to flip the property but have not done so yet. This is my first transaction, and I’m reluctant to submit an offer to purchase. I plan to use transactional funding for the back to back closings, as well as for the earnest money deposit (I hear there are companies that provide funds for EMD). In the meantime I’ve posted a lsiting on Craigslist for an end buyer and have had 3 inquires. I haven’t called them back yet because I don’t have the property under contract and don’t know what to say to them I just need some guidance on how to move forward. Any help would be greatly appreciated.