48 unit under contract - am I forgetting anything?

[Roberto Gutierrez]

I’m currently under contract on my first sizeable multifamily property. I’m including details about the property below. If you all could skim through and let me know of anything it appears I haven’t considered or anything that alarms you it will be greatly appreciated!

48 unit complex in Hopkinsville, KY

Population - ~35,000

Median income = ~$34,000

Price - $1,225,000 - $25,500 per door

Gross income - $261,000

Expenses - $127,000

NOI - $135,000

Going in cap rate – 11%

96% occupancy

Average rent across the 3 floorplans is $440, while market is at $515. $4000 per unit is budgeted in my underwriting for renovation.

Building Qualities – 6 buildings - 33,200 SF

● 1 bed 1 bath – 550 SF – 8 units

● 2 bed 1 bath – 700 SF – 24 units

● 3 bed 1 bath – 750 SF – 16 units

● Two-story

● Individually metered electric, landlord paid water

● Central heating and air

● Copper Pipes

● Built: 1975

● Pitched roofs – All replaced in August 2007

● Onsite laundry facility – Units purchased 2012

● Parking lot resurfaced 2005

● All units in good shape, with minimal cap ex required

● 1 mile from 5 star public middle and high school

● 4 units recently renovated with $100 rent increases

This is definitely a tertiary market, but population growth is on a slow rise (1% from 2010-2016). Property is in a C class neighborhood with high rental demand and very little crime. The Military, Automotive, Agriculture, Distribution, Food, Machinery, Plastics and Printing industries are the largest employers in Hopkinsville. It is also a half hour drive from Clarksville, TN, where additional jobs reside. I’ll be calling the chamber of commerce to ask about incoming/leaving employers as well as the local police department to get the low down on the property.