8 Unit Multifamily for Sale, Need Help w/ Financing

[Autumn Allen]

4/20/2016 

I live just down the road from this multi family opportunity! Auburn WA

I have a lot of experience in dealing with Single Family, but I would like to acquire my first rental. Only problem is that asking is ~$920,000 for 8 units, and I only have 6000 cash to my name (been sending support money for an ailing family member). I am excited about the deal, but I obviously cannot do it alone. I am looking at 2 options - 1. lots of creative financing by myself, or 2. a financial partner that provides the purchase & rehab money, and I provide the deal, oversee the project from beginning to end and save, save the financial partner time and effort, and get a little of the monthly cash flow.

Deal info:

7230 SF building, lot 38170 SF

Cap rate: 8.10%, NOI: $68,636

Gross rent multiplier: 8.64

Occupancy: 100%

Stories:1  Built: 1991

3 bed 1 bath, rent 1110, 915 SF, 4 units

3 bed 2 bath, rent 1110, 915 SF, 4 units

Operating expenses: $29,818

Effective gross income: ~$104,000

Sale description: 8.10% Cap Rate! Cash Flowing 8 unit! Upside opportunity by increasing rents. All units are 3 bedroom. Hardwood laminate flooring, newer roof on one building, some units have new cabinets, fencing & appliances. Exterior recently painted. 4 units have 1 bathroom. 4 units have 2 bathrooms. Residential neighborhood. Growing Community. Easy access to shopping & restaurants. One exit south of the Supermall. 5 min to Highway. 30 min to SeaTac . 25 min to Tacoma. Assumption on loan balance of $577,000. All units have washer and dryer. 

I am a hard worker and have been studying all the BP material on rentals and multi family. 

Anyone interested to help, partner, or provide ideas? Thank you! Autumn

[Patrick L.]

@Autumn Allen It looks like the expenses are very understated to come up with that cap rate, which is pretty typical.  I found the listing and they list some expenses but there is no vacancy allowance and no management expense.     The only expenses they list are utilities, insurance, taxes and only $4600 of "other expenses" which would bneed to cover all of your repairs and cap ex I guess (although I would expect to spend more over the lifetime of the property).  

Current owner paid $776k a year ago, has there been that much appreciation in your market in the last year?