Norwood 10 Family - Cincinnati, OH

[Theo Hicks]

I have been back and forth with the owner of a 10 unit property in Norwood for the past few weeks. They purchased the property back in late 2013 for $245,000 and have put about $100,000 in renovations, so the property is basically turnkey. Here are the numbers:

Gross Rent: $84,768

Expenses: $32,226

• Repairs and Maintenance: $3000
• Utilities: $11,359, Taxes: $6,570
• Insurance: $4,345
• Vacancy: $4,410
• Reserves: $2,543

Asking Price: They plan on listing it at $599,900 in the spring, however, I have negotiated them down to $500,000. At the above income and expense, this is a cap rate of about 11%. I have already identified areas where the expenses can be cut back a few grand a month and the rents are definitely below market value, but I want to buy based off the current operations.

Any Cincinnati or Ohio investors have any advice on this deal? Let me know if you have any more questions!