Does this sound like a good deal

[Dustin Lavender]

I'm looking at a 16 units apartment deal. It is solid. Built in the 70's. Could use some slow updating but is all currently rented.

It is really 4, 2 story town houses side by side with 4 2/1 units in each house. There are some value adds that can be done right off such a as raising rent to market.

Here are the #'s on it:

Appraised -650

Asking-480k

Down-15%

Tax - $6k

Ins-10k

Mrtg-2800 per month

Rent income-6400 (market here should be $500 per unit, or 8k)

What are your thoughts on this deal?

How do you go about refinancing after purchase to pay back private money? Is it just a line of credit against the equity or a second mortgage?

[John Knisely]

@Dustin Lavender, the elephant in the room is why is the ask price 170k below appraised value? What is the seller's motivation? How did you find the deal?

Your mortgage value is P&I only it seems on a 15 year loan? Adding T&I, your PITI payment would be closer to $4300. Still in the green compared to your listed market rents. Haven't yet factored in vacancies ( I'd expect at least 5-10%), especially if any folks are turned off by the new ownership and increase in rents. Are you self managing? If not add in 6-10% for property management.

Not saying that makes the deal bad, just seems like a few unanswered questions. I can't speak much to refi, I'll let someone more experienced in that department handle that one.