Help on a Quadplex deal.

General Real Estate Investing
1

The deal:
Quadplex
price: $200,000
3 units are 3bed/1bath
1 unit is 4bed//1bath

Owner has owned the property for 20+ yrs.
2 units are leased with 1 not paying rent.
the income potential is $700x4= $2800 monthly
The property is in an up and coming neighborhood perfectly located between shops, medical center and prominent street in the area. The property is located in Texas so there are big things happening even in these times.

The units need some work but nothing major. Mostly cosmetic. replacing carpet in the entryway, stairs, ect. then some work in the bathrooms and kitchen to clean up.

Owner pays water and trash.

The owner is willing to owner finance 20% at 6%.
The owner has not even been to the property in a few years and has his son living there rent free and has managed this property poorly. I think with new management and some clean up with light maintenance this property will be a full. What do you think?

There are not much financial documents pertaining to the property. Like I said, the owner has poorly managed this place and hasn’t even kept records. And I know I should use this information to negotiate a lower price. but what is that price? thats what I need help with. Thats all the info I have on it.

2

Not enough information to keep from speculating here.

What are the market rents for similar size and type of units?

What is the market GRM, or CAP rate?

What are the comps for similar properties?

What work needs to be done on the place?

Have you been through the units yet?

Is the seller willing to let you see what he’s got for sale without an accepted offer? If not, why not? If so, write an offer for $5M cash (just kidding, don’t do that). :shocked

Have you spent any time with the seller to know what he plans to do with his money; why is he selling; why did he buy this hell hole in the first place; why has his son not been taking care of the place; how long has his son been stealing rent money; why haven’t the utilities been paid on time and what is the giant deposit you’re going to have to cough up when you buy this place, because the utility company demands it…since you’ve never had service in the area, and this property has been chronically delinquent in paying… :banghead

Will he take the down payment over 12 months?

If he’s quoting rent potentials to you, will he guarantee those rents…?

Are the taxes current? How much is owed?

How many times has the main sewer line been snaked this year? Why?

Is the place currently insured? Are there existing impounds that you can capture without prorating them?

What kinds of lease agreements have been signed. Which tenant has the 15-year lease at a dollar a month? :banghead

What’s the cash price for Satan’s half acre?

Whose got the $45 dollar security deposit and no personal information on file with anyone? :banghead

After you’ve answered these questions you won’t need anything more from us. You’ll have enough ammunition to strike a deal, if the seller is as motivated as he sounds on paper.

Good luck …and answer these questions so we can all weigh in on why this is the worst deal since the Brooklyn Bridge was sold for the fortieth time… :banghead :beer

:beer