Possible deal? Any suggestions or past experiences are welcome..

[Chris Ward]

Hello BP investors! I have come across a possible deal on an 8 unit apartment building. It was a rehab project that failed at some point and has been abondoned. The building now sits as a cbs block construction shell that is partially framed inside for 8 (3bd/2ba) units. It is a 2 story building of about 7200sq ft. It needs electrical, plumbing, hvac, landscaping, blacktop for parking area, interior finished obviously and maybe a new roof. The asking price is $120k, the issue is the rehab/construction costs, likely to be 2 1/2 times the asking, $250-280k. When done I estimate the value to be over $400k. Rents for the area should be $700-900 for 3/2. I would consider splitting 2 of the units to create 2 additional 1 bd units thus increasing the diversity of the property and the income by apx $800-1000 per month. I have plugged in the numbers and the result seems to be good.

I'm concerned about the financing, the time for completion, the estimates for rehab, if a lender will go for this type of deal since the rehab cost is huge compared to the purchase and the fact that this would be the biggest deal/project I have ever attempted. I am a GC but have been out of the business for a while, I've done some flips and rehabs and built some homes from ground up, just not anything recently. I guess I'm looking for some guidance and maybe another set of eyeballs before I dive in head first...

Let me know if I can offer any more info to help with the evaluation..

Thanks, Chris.