Passing on the discount to the tenant

[Jorge Hernandez]

Hello Bigger Pockets

Sssooooooooooooooooo

I found a deal,

The rents are about $500 under market rate. Cool.

After doing the calculation, in which I didn't add my standard 10% for vacancy, maintenance, cap ex or management fee, according to the dscr calculator it equated to a dscr of 1.07.

I had to increase the rent by $300 to each of the current tenants (4) to get the 1.07

The 5th apartment is empty so I am proposing to leave to at just below market value. This apartment has to be rented in order to reach the 1.07 dscr valuation.

The real estate agent valuation is based on having the property 100% occupied @ max market rent value plus the parking. Maybe 4 spots.

I don't know if the current tenants can afford that much of a rent increase. Being in the tenant shoes, if my rent goes up like $500/$600, I can either leave or become a squatter.

It could turn ugly real quick. I don't know if cash for keys is an option.

Real estate agents..........................they never fail. I guess that's why they are called seller's agents. 

Perfoma numbers never ever match.