Deal Analysis Time!!

[Nik S.]

Looking at an 18 unit APT building.

Occupancy is low @ 66%. One reason is the property is in receivership so these guys really aren't to aggressive to stabilize the property, they just want to sell it per the banks request. There was a fire in the building in February, therefore those units that just got renovated haven't really got much exposure yet. (5) units are completely brand new after the smoke damage repair.

I am unable to get trailing data as it's now in receivership but I think I can make it work for the right price.. tell me what you guys think! I AM NOT UTILIZING PRO-FORMA, I am running the CURRENT operating data info & basing my offer price on so. The upside will be much more positive but regardless. Keep in mind the area is probably a solid "C" area. The buildings are pretty decent and clean inside. Tenants are good too. Not bad, seen worse. A few four streets over, the area is a little rough.

*****18 units*****

(1) unit is for an in house maintenance couple (free rent), responsible for make readies, landscaping, light and minor repairs. Tenants call him when there's an issue.

(11) units are currently rented for a gross rent of $5000 monthly ($450 p.month)

(6) units are vacant

Annual Taxes - $3700 ($310 p month)

Insurance yearly - $3500 ($300 p month)

Utilities for buildings - $750 per month (tenants pay ALL utilities, owner responsible for none except garbage)

Property Management fee (6% of gross) - $300 per month

Maintenance - $500 per month (regardless I have an on site maintenance couple, there are some jobs that require the Yellowpage companies, so I went on the higher side)

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There is probably $10k in deferred maintenance. All the units are in good shape and are rent ready. Looks like I just need the right system / team in there.

Asking price is $425,000

When the market was good, someone in 2006 purchased the units for $550,000.

Considering its in receivership, I believe I may be able to get a deal that's worth my time.

Let me know all your thoughts and your questions.