21 Unit in Fallbrook Ca

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Hello everyone, I am currently writing my first commercial offer in Fallbrook Ca on a 21 unit apartment, asking price is 2.8 million. How long is the typical due diligence on a property like this?

[Andrew Johnson]

So Aaron Getter here’s my due diligence (hint: I’m with Scott Roberts and Michael Swan )...

$2.8M asking price
25% down, 5% rate, 25 year amortization
$12,276 per month debt service
$147K per year

Stated NOI is: $95K
Usually stated NOI is overly generous (in my experience) but if it’s accurate you’ll lose $52K per year.

Difference between gross operating income and Gross scheduled income is $12K. So if expenses are flat (which they won’t be) you “only lose $40K per year”.

It’s been on the market over 12 months. Which means they’ve had a chance to raise the rent on 100% of the units.

To VERY OPTIMISTICALLY break-even you need to knock $575K off of the asking price. And that’s not counting lender fees, origination costs, appraisal fees, and a few other “small money” categories.

By the way, I could be wrong 🤷🏻‍♂️ This is literally diligence done on my iPhone.

But there are only so many $2.8M apartment complexes in Fallbrook with 21 units.