walkthrough of 154 units

[Rich Weese]

Board seems to have slowed down for the nite. I think I'll shut down. I have probably a 3-4 hour final walkthrough of a 154 unit buillding that I close on friday. You don't realize how exhausting that can be, unless you've done it. I'm asking for a credit for some repairs. Only the amount is left to calculate. I need a break. This has been fun to be on the board tonite. Those that have sent me properties to consider, I'll try to get to those in next couple days. Thanks. Rich in Dallas.

[Rich Weese]

Chris, In response to your question as to why, this is a post I posted a week or so ago. My reasons for purchasing were varied.
1. Unless I steal something, I want a property that is hands off and runs itself,,,almost. This one has the same professional mgmt as the last 7 years. They manage 1800 units and run that from my location. 2 of the 4 sellers are the principals of the mgmt co. and have kept the building in the 90"s in occupancy.

2. I negotiated a good deal with a seller credit returned of 50K. I also had a full inspection and sellers did ALL items in all units.

3. The property qualifies for 2 new stimulous projects(stupid govt). The Weatherization Assistanc Program has an amount of $6500 per unit available . That is $1,001,000 max. We have all the requirements covered and a company handling the application process. These funds would be used for new high efficiency a/c systems, new windos, new APPLIANCES, and new low flow toilets.

4.15% cash on cash. Good upside . Rents are about $.07 per square foot below average.

5. Super high traffic area with elementary school, and park on the same block.

I like Dallas area and have tried to buy other props here and am still trying. I also got tired of trying to buy something and coming up dry. As I've said, I believe it is time to BUY BUY BUY.
I'm still looking and will be analyzing properties I've been sent over the weekend and while on a cruise next week. Time is right. Rich in Dallas.

I've been negotiating for 6 months on an extremely nice "class c" property in Dallas area. We're finally going to close on the 14th of Aug. According to those that believe the 2%-50%, I must be stupid, but I'm surviving!!
Actual #'s . 154 units with good mix and # of buildings. No chiller system. Tenants pay all utilities. Over 91% occ for last 3 years. Same owner and mgmt for 7 years.
Price is $4.1 million with 1.3 down and 2.8 loan at 6.5% 25 yr(I have no verifiable income so rate and term not great!! I show no taxable income). Will refi inside a year.
2007-$919K inc. 501K exp.418K noi
2008-$921K inc 503K exp and same 418K noi.
2009-465K for 6 mos and 92% occ.projected noi of 429K.

According to the 2%, I'm low. According to the 50%, I'm high. It must be a bad deal! I believe it is almost a 10 cap, with NO deferred maint( new roofs, a/cs and other goodies.
With my loan, I'll show a little over a 15% cash on cash! This is with the same mgmt onsite, and the same prof mgmt company. I'm pretty happy with this turnkey investment and like the return- even though it is a "failure" on the 2-50 stuff. Maybe , if I try really, really hard, I'll be able to get the occ up to 95% and then it may be a "good deal " as per the 2-50 crap.
I thought I should share an actual deal with the board and let you shoot me down. I'm still pretty happy with it. Rich.

p.s. I'll furnish more info on a self- storage facility I'm buying in FL. Current appraisal of 4.2 and purchase price of 2.710. I don't know if it will make the 2-50 crap- and I DON'T CARE.