Feedback on this potential deal 11 unit apartment building

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Hey everyone,

So I was brought this deal by my realtor.  It's an 11 unit building, and I've analyzed the numbers that I have for it so far. 

I'm just looking for some feedback from the group here, as I haven't looked and analyzed much 10+ unit buildings.  My experience is mostly from duplex - 4plex, and the numbers are so much different for these bigger buildings.  Is this normal?  What do you guys think of the numbers for this particular deal?

(I have attached the analysis I have in this post)

Thanks,

Nico

[Marc C.]

By the way, if you make an offer, use a Letter of Intent and not the Realtor's purchase agreement. Saves them time in writing up an offer that will almost certainly be rejected (due to that appraisal). Appraisals are pretty worthless to buyers...they are something that only banks need to rely on. But the seller gets the appraised value stuck in his head. Just looked at a 4-plex recently that had an appraisal from last year for $167,000, but that is about $30,000 above what I would pay for it. I risk insulting him with a low offer, but if he doesn't take it, I'll have only wasted a half-hour to write the LOI and a stamp to mail it. My LOIs have 3 options: 1.) All cash, closing 90 days after the Seller gets us all the property records, price subject to appraisal and time subject to lender's performance; 2.) 20% down, Seller finances balance over 10 years, closing 21 days after the Seller gets us all the property records, 3.) 0 or 5% down, closing 21 days. In all of them, I include the TOTAL amount the seller receive, including the interest (5%). I also describe the percentage of taxes they will likely incur next year as a result of the sale.

I will say that, in my market, we are getting a pretty good response on direct mail to apt. bldg. owners. Everyone gets a business card on a magnet that touts "We buy apartments and mobile home parks." "We are local investors." "We are not Realtors; no commissions" and gives our Facebook page as a place to go for the latest multifamily news. Probably should add, "We will make you an offer within 72 hours." Who calls? The guys who want to retire; they aren't in a hurry to sell/not desperate, but like not having to pay a Realtor, AND they are interested in seller financing to supplement their income. We will send everyone another letter in 3 months, perhaps with an article in it about the local market. Postcard 3 mos. later. Someone is ALWAYS looking to retire. 

Can't believe I wasn't doing the letters for the last 3 years instead of looking at overpriced broker deals. And I can't believe this strategy wouldn't work in other markets besides ours (Santa Fe / Albuquerque, New Mexico.)