I was just contacted by a friend about the following opportunity. I have only a few sfh units right now, so this is a major change of direction, but I have the resources to possibly make this happen. Can anyone with ACTUAL EXPERIENCE, not other newbies guessing, tell me what I really need to do to evaluate this deal. I know I need to check out actual income statements, vacancy, and deferred maintenance, but how do I go about acquiring all the needed info, and what other things do I need to know. This apartment complex is in a lower income area so I’m sure there are management issues, but the numbers they list here look like they could be way off and still leave room for high cash flow.
The Listing:
Multi-family Property
158 total unit(s)
Year Built: 1976
Complex features: One bedroom unit(s): 32, Two bedroom unit(s): 94, Three bedroom unit(s): 32, One bedroom rent: $457, Two bedroom rent: $479, Three bedroom rent: $676
Type: Flat
Heating features: Electric Heat Src, Forced Air
Interior features may include: Electric service available
Exterior features: Sanitary Sewer Service, Storm Sewer Service, Water Service
Estimated gross income: $967133
Tenant pays: Electric
Owner pays: Sewer, Trash, Water
Approximately 12.4 acre(s)
Lot size is between 10 and 20 acres
Also, 6% realtor commission on this would be 180K, which is way more than I need to pay. My realtor, who I have used loyally, does not have a lot of experience in this type of deal, but I would still like to use him if it wouldn’t be a serious mistake to do so. What kind of commission for this amount of work is fair, is the sellers realtors commission (90K) also fair game to deal on, and am I correct to assume this all needs to be discussed in advance of any other talks.
Any productive feedback will be appreciated.
Thanks.