Question for a newbie
I have a chance to purchase 16 units in a condo complex as a block (as this is how the owner purchased them). My question is, Should i evaluate each unit on its own for cashflow or evaulate them as a block for cashflow?
6 of one half dozen of the other. The cashflow of one times 16 is the cashflow of the block. If you evaluate the cashflow of one and find it to work 16 will work just the same.
Hmmmm…not necessarily. If there are a mix of unit sizes, costs, and incomes, you can’t effectively do a cashflow analysis as a group…
Keith
Ok, I was assuming they would all be the same size being in the same complex. I guess that wouldn’t necessarily be true.
If you are required to buy them all then you would cash flow then as one block purchase. It doesn’t matter if you lose on a couple if you make out like a king on the rest. The deal is 16 units so I would evaluate the purchase as one single deal. Lose on some, gain on others is fine, just come out ahead overall.
If I was buying the whole block I would have to make sure I get them at a discount. Keep in mind when it was built and if there is going to be any pluming or anything major like that needed to be done to any or all of the units. Could turn out to be costly. Buy at a discount 
be sure to check into the condo fees AND how the association is doing (are they underfunded and you are going to get wacked by a special assessment in the future?).
condo fees can be a real killer of cash flow as a rental. for such a large block I probably would not pay over 50 or 60 cents on the dollar of what one of these units would sell for individually.