"Hard" Down Units - What Does It Mean?

[Danielle Fattizzi]

Hello my very helpful friends!

I will try to keep this simple and short. 

Analyzed and sent an LOI on a 32 unit Class C property in Jacksonville, FL. Was in the middle of negotiations on the price (have not moved to purchase agreement yet) when I received an updated rent roll from the broker. It appears 6 units have been vacant for some or all of the last 12 months. I inquired with the broker in regards to the nature of the vacancy of these units and he replied that they are "hard" down units.

I have a general idea of what that term means but I am hoping some of you can shed more light on the extent of what I could be looking at here. Any help is much appreciated. 

[Nik S.]

Danielle Fattizzi be careful with the numbers provided. A "hard" rehab could mean many things. There could be water damage (or other large damage ) and the units need gutted. I spent over 10k on a 600sq ft 1 bedroom apt unit... Check the units out for yourself for estimations. Don't trust the brokers verbiage, do your own due diligence. Call insurance companies to get quotes, check utility bills etc...