Touring a 12 plex

[Abou C.]

Hello

Touring a 12 units tomorrow at 10am with a agent, property been on the market for 1 year, currently just two tenants. From what the agent told me a family owns it, but I discuss they never cared to update units or get more tenants overt he year.  two buildings 6 units each  priced at 225k each totaling $450k.

I am wondering where that $22k would come from, if there is only two tenants now, landscape need some tlc, looked through window units need updated from what i can see. 

What things should I asked or look for when meeting with agent tomorrow?

[Mike Campbell]

Abou;

I have experience in buying distress 8 unit with two tenets.

The 1st thing I did was to visit each unit make detailed notes as to what was needed to bring that apartment back to life to attract the higher end renter.

Than, inspected the foundation and the roof, attic, common areas, went to court house looked up records on property, spoke to building inspector,They usually have some inside info on things that nobody else has.

While doing the above, find out what is market rent is, this will help determined cash flow after repairs.

What I did to get renters in, as soon as I finished remodeling an apartment I started advertising for rent with a lower rent rate then others in the market, the idea is to get her fixed up and all unites occupied, as soon as that happens you can start raising the rent. 

Don't just put a body in there to put a body in there, you wont have the time, energy or money to evict at this point.

Take cost to remodel plus cash flow to the bank with your asking price, if you can get a pre approval to buy the property than present your offer with what is needed to spend on property.

It took me a year to get the bank to take my offer, once a month I would stop by just to say high, they had other offers, but then they would go to the building find out what a disaster it was and either walk or change the offer, the bank always said no, why you ask, because not one of the offers came with a pre approval, unbelievable, cash talk BS walks.

The Bank I received the loan from looked at the remodeling numbers than market value after completion, I took the banker on a tour of said property showed the my written plan and bingo, he says this is a great deal. BOOM.  

Like I said, took me a year to land the 8 unit, it can be done, you have keep working it out.

Sorry for all the blah blah above.

Mike