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Updated over 8 years ago on . Most recent reply

User Stats

24
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6
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Dawn Roof
  • Rental Property Investor
  • Charlotte, NC
6
Votes |
24
Posts

Looking at First Multi-Family deal, what am i missing

Dawn Roof
  • Rental Property Investor
  • Charlotte, NC
Posted

I'm new-ish to REI, with one single family home purchased last spring so far. That has gone very well, and we are looking at stepping up the game to a Multi Family. The one I have my eye on is 6 units (two triplexes next to each other) (4) 2 bed/1 bath, and (2) 3 bed, 1 bath, and based on all of the numbers I have run (multiple, multiple times) it looks AMAZING on paper. My main question, is how can you verify the numbers that the seller is giving you? I'm so afraid that they are incorrect, or just plain lies. This is a huge investment for us, and I don't want to make a terrible mistake. Another factor is that it's in a not so great neighborhood, but that has signs of revitalization going on. How do you guys make sure the numbers you are working with in terms of rent roll, and operating costs are good??? The seller has said that it's 100% occupied, and has been, but can't give me a history because they have only owned it since Nov of 2015 (they are flipping it; Did some repairs, and raised all of the rents significantly.)

I still have not seen the inside of the units, because we can't get in until an offer is accepted, but it's hard to make an offer, when you can't see what you are buying, and have to take the word of the seller at face value.  Any advice, on how you move forward, and how you verify the numbers would be greatly appreciated!!

  • Dawn Roof
  • Most Popular Reply

    User Stats

    286
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    159
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    Nancy Curran
    • Real Estate Investor
    • Chicago, IL
    159
    Votes |
    286
    Posts
    Nancy Curran
    • Real Estate Investor
    • Chicago, IL
    Replied

    Well, that is one way to verify rents is by seeing a property. If they are saying rent for 2f is $1200 and it's a gross dump, you can bet they aren't getting that. Also, how the tenants act toward you is key.  I find not getting into any apartments at all is ridiculous and it's a red flag. 

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