12 Unit Off Market (what do you think)

[Cody Elliott]

Hey guys, I recently came across a 12-Unit Multifamily "Deal" (using that term lightly) and I wanted to give you all of the Info and see what you guys think its Worth. Or if its worth Pursuing. Its in an A-Class area.

This would be a Long Term Buy and Hold. My plan would be to get Conventional Financing with a Rehab Loan, and Refinance my Cash Out (I have the Cash for up to a $200,000 Down Payment). Also considering, using a strategy from the BP Podcast, Depositing $100,000 into a CD at the Financing Bank, as a means to negotiate better Terms, like a longer Fixed Term, or a Higher LTV%, also allowing me to Borrow against the CD.

The Owner is 70, and has owned the Property for 20 Years, and has a history of lowering rents instead of doing deferred maintenance.

**All of this Info has been gathered before approaching the Owner**

Property Info:

-Built in 1940's

-12 Unit Building 6-(2Br/1Ba) 6-(1Br/1Ba)

-Tax Value $1,300,000

-Annual Taxes $16,000

-Current Rents are ($850 for 2/1) *couldn't find info on (1/1) but it is well below market Value

-1920's Renovated Building in the area Rents for ($1,245 2/1) and ($1,045 1/1)

-No Property Manager (owner managed)

-Owner Pays Water and Utilities

-All surrounding Apts. pay for Water/Sewer Only

-(A Class Area) with Mixed Use Buildings and Student Living

-Walking Distance to University

-2 Units currently Not Rented

Rehab/Needs -(from what I can see)

-New HVAC, has Radiator Heating and Window Units

-Living Room Floor (Sinking in) on Top Floor Unit 

-Cracks in Interior Walls/Exterior Brick

-New Roof (I'm assuming) Large leak in Top Floor Unit

-New Fire Escape Staircases 

-Updated Electrical

-Updated Plumbing (I'm assuming) built in 1940's

-Interior Updating

I know its a lot of Work, but It's in a great area, and there is a ton of room for Value Add.