HUD Property Question

[Oren K.]

Hi all,

Looking for anyone who has property management experience with Mulit-unit (non-senior) HUD Project properties.

There is a ~30 unit property in Ohio that I have under contract but the PM I am in discussions with is saying that they need a much larger budget for maintenance, administration, etc. then the current operator is showing.

On the one hand, I respect the PM, feel that they are trustworthy and they want to take this on. On the other hand, the budget they are proposing reduces the return to almost nothing. The main issue is the labor. The current operator is working with just 1 full time person doing all the admin, basic maintenance and custodial work. The PM says they need at least 2 full time people if not more to do this right.

Either the current operator is getting away with under resourcing the property or the PM is overestimating. This would be my first HUD Project property I don't have enough experience to know which it is.

Anybody in Ohio (or anywhere else in the US for that matter) who has HUD Project property(ies) care to share what % they spend on labor or how many people they have working at a property?

Thanks,

Oren