I just found a FSBO that I wanted to share and see what people thought or the deal and my assessment. I have yet to see the place but wanted to get comments as to whether I am analyzing this deal properly. Also, how does the purchasing process work with FSBO’s seeing as there is no intermediary? For instance, are there standard offer templates that I use to present my offer to the homeowner?
Here’s the deal:
5 Family - $350k
3,500 sq.ft.
2 bedroom units
Separate utilities
All units are currently rented for $700-$725/month
Tax assessment - $366k
RE taxes - $4,200
I would think I could push the rents up to $725-750 due to the average rents in the area. So my analysis is on the conservative side. Did I leave anything out of my analysis? Would you do this deal?
I like to spend some time looking at these numbers but on wrong computer to plug in info.
However I will bring up some questions.
Are you aware that you need commercial financing since it is a 5plex? With your downpayment of 20% you will be fine there. However commercial financing is also income producing driven so the numbers need to work for financing.
have you considered the cost of lawn care/snow removal, who will manage property, are units currently rented 100%, if not cost for advertising, are they on yearly leases or monthly, any updating need to be done to raise rents. Are you forming a corp when you buy this? Expenses involved there should be rolled into the operating cost of the unit.
Is the current owner will to allow you to view all leases in place (this is important), Does the landlord have deposits on each unit for damages and last months rent (he needs to roll this to you on closing). I do not like buying commercial unless there is some kind of deposit unless I plan on getting the tenants out ASAP…
Where did you get your estimates for ins, taxes, maintance, etc.
last question… You want to offer 250K, is it worth 250K…