Apartment in Kensington, Philadelphia - Would you do this deal?

[Nathan J.]

Hi Guys,

Would you do below deal? It's a 6 unit condo apartment building that was high-end rehabbed. They are large open plan spaces with great fixtures and style. its 100% occupied currently. And it's in the Kensington area of Philly which seems to be hot.

I could get this done at $1.15mm

Total Expenses 27,031 (breakdown below)

NOI 77,564.

I see about a 6.7% cap rate and a 8.7% CoC (i can get a 30yr term at 25% down and around a 4% rate). Which i admit is thin and i would not normally do this. But it's a really nice building in a rapidly appreciating area which is what has me thinking hard about it. What would you do?

Monthly Income 9,175

Gross Potential Income 110,100

Vacancy 5%

Effective Gross Income  104,595

Taxes 1,799

Insurance 3,000

Water & Sewer 1,374

Electric/Gas 562

Management Fee 5,230

Staff Payroll, Landscaping 900

Maintenance/Repairs 5,230

Admin Costs/HOA 1,500

Security 261

Replacement Reserves 5,230

Trash 450

Other Expenses / Adjustments 1,496