Apartment Analysis Kansas City part 1!

[David Murff]

Hey guys, it’s the newbie again. 

So I found a property I think has huge potential in KC area. It’s an 8-unit garden style apartment building. The current owners bought it in 2015 and it looks like a true C in a B class neighborhood. Great highway access, close to plaza/downtown/ class A businesses close by. 

It’s off market and haven’t reached out to owners yet. Property definitely has below market rents, it’s 100% occupied and owner lives on-site. Building needs a lot of love. I’ve identified two comps with almost identical floor plans right around the corner. 

Questions are:

1. How should I approach the seller(direct mail or hire agent)?

**Hoping to get creative on the deal or get some credits at closing as I imagine there is quite a bit of deferred maintenance.

2. How accurate is the county appraiser’s income valuation report?

I’ve dug and found the county appraisers income valuation report

Info includes:

Sqft 

Rent collected per unit

Unit type

Building age/type/class

Gross Scheduled Income

Vacancy/credit loss

Estimated expenses 

Cap rate they used

Income value(PV)

The most important question I feel is whether this information is accurate way to gauge the property before I approach the seller. It seems a lot of information is missing as the expenses equate to 28% of the EGI. 

I appreciate any advice and thanks again guys!

[Steven May]

Very difficult to get owners to sell on first approach. As stated above, they probably get contacted all the time. Can't hurt to send direct mail and if you can find a legit phone number give the owner a respectful phone call expressing interest. Also, as stated above, do not trust the county appraiser's report - you need actual financials from the owner. Have you owned an apartment complex like this before - if successfully contacting the owner and the rare chance they do want to sell are you prepared to obtain commercial financing? I've sold a 11 unit and 12 unit apartment complex in Kansas City this year so happy to chat if you get further than a preliminary interest in the property.