I have a 24 unit under contract. I have all the details, but to keep it short and simple, the negotiated sales price is 1.2 mil and 10.5% cap. NOI is 115k. 20% down with 10% seller carry means 240k out of pocket. bank willing to loan on arm at 6.5%. cash flow is about 3k/month with upside in adding additional laundry. rents have recently been raised. 12 buildings on 1 parcel. can be resurveyed and made into 12 parcels. then refi at 1.5 to 1.6 mil or more. some more experienced investors let me know what you think. if this is a good deal i would need more investors. i based cash flow on 5 % vacancy which is high for area and 8% management fee. the property is in florida area.
How do you want us to evaluate this deal? If it works for you, do you need a bunch of faceless people over the internet who for all you know could be 12 year olds who like to mess with people telling you it’s a good deal?
Spill all the details! We’d need an itemized list of EVERYTHING to tell you if the numbers work as well as you think. Also, how can you know how much it cash flows if you need investors to help you fund the deal? Even conservative investors will want atleast double what you’ll pay for that ARM. What is the escape and evade plan here? Do you plan on keeping forever, selling it after you get it subdivided? DETAILS!
laundry isnt going to help you that much. Are all of the units rented? expect repair costs, insurance, taxes. There is alot more that is needed to know to truly understand whether it is a good deal or not. what is the current value of the land and buildings? 6.5% sounds great but it doesnt sound the deal is making enough to justify 240 out of pocket. How is the area? are values going up considerably or is the area stagnant? New jobs being created?
thanks for the help. i opted out of the property. i decided iv’e gotta focus closer to home before venturing out to something across the country
Good decision. Start with where you know the best with properties you can actually go see, not just numbers on paper.