Thinking about making an offer - 23 Unit Multi Family Apartment. Need advice

[Thomas Blaine]

I am looking at a 23 unit in Garden City, MI. Suburbs of Detroit Michigan. Looking for Seasoned Multi Investor thoughts on this property. Take a look at the image with all details. The owner supplied the numbers for Gas/Electric/Water. I went high on all of the other expenses. This is a B- to C Area and a C building. The owner is willing to do a Land contract with 10% down @ 6% with a 10 year balloon. 25 Year AM. Owner Pays for heat & water currently.

I have included a 30K budget for repairs & Capex.

She is asking 900K.

Questions..

Is this a deal? What should the price be?

Is $12,000 a good budget estimate for repairs & maintenance on a 23 unit?

Am I crazy to buy a building with owner paid Heat?

Any other thoughts?

[Jean Bolger]

How old is the building? What type of construction? These will effect maintenance costs and utility costs. I don't know your area, so there are a huge number of economic/demographic questions that I can't address. But be sure to think about them. There's so much more going on than just the numbers with a C class property. They can be brilliant investments or terrible ones, and look just the same on a spreadsheet.

I wouldn't take the owners numbers on utilities, call the utility company and get actual numbers. I wouldn't say you were necessarily crazy to buy a place with owner paid heat- just crazier than me ;)

You don't seem to have water listed under expenses? Again, you should be able to get actuals from the water co.

I would agree with Jon W on upping the mgmt and vacancy.

If the gross rents are right (get this proved), and you assume closer to 60% expenses (more reasonable) then she's asking a 7.5 cap rate. Which seems quite high for a C area and building in MI, but again, I don't know.

Just some stuff to consider!