I know you guys have different ways of running the numbers on a property. I always read your arguments/discussions on which one is better. Anyway, I would like you experienced guys to evaluate the numbers on a property for me and let me know what offer you would use as your max.
All the properties the realtors give me, I basically throw away, until I can do the calculations myself. What numbers should I post for your evaluations?
If you’re talking about a rental, I need gross rents, purchase price, and rehab cost to evaluate a deal.
Mike
Scheduled Income - $186,780
Taxes - 11000
Maintenance and Repair - 22000
Utilities and services - 14000
Insurance - 14500
What do you think a fair offer is for this property?
Forgot to mention, the units are metered for electric. Owner pays for water and gas.
apartment buildings almost certainly have operating expenses over 50% of the rent.
I would want to get it for around $775k in order to make it work. Even lower if I’m paying utility bills.
Brian,
Here’s how I see this deal:
Gross rents: $15,565
Operating Expenses: $7,782
NOI: $7,783
Mortgage ($975K, 30 yr, 7%): $6,486
Cash flow: $1,297 per month or $35 per unit per month, which is TOO LOW for me. I like $100/unit/month.
More importantly, I don’t buy buildings if I have to pay the heat, unless it’s cheap enough to switch over to individual metering. Is the heat gas?
Mike
All the units are newly individually metered for heat and AC. There is a new roof, and the interiors are almost new. There is some slight landscaping needed, depending on personal taste. And the walkways and the parking lot has been redone last year. Also, option to owner finance.
Would you make an offer of 10% or 15% less than asking price?
At 900 000$ I would buy ASAP.
What market are you in? Is it depreciating? flat?
Well that market is starting to appreciate, but for the past couple years is was almost flat. Some population increase, and job growth recently. It is projected to slowly increase with a couple large companies building facilities nearby.
I am going to see if I can push through an offer.