84 Unit - Deal Analysis Case Study

[Scott Skinger]

This question is for you seasoned mf investors out there. I'm trying to learn more about how you might look at property so I can refine my own criteria and become more efficient in my analysis. For this example, let's assume that the building(s) fits my criteria (25-100 unit building with a minimum NOI of $150K, cash flows, local to me, etc.) and the numbers work. I would like to know more about the other factors that you consider...good and bad.

The example building is on Crexi, https://www.crexi.com/properties/95716. Again, I'm not asking if this particular deal is good, just using it as an example to ask some questions that have come up several times before in my head.

-located in Mt. Pleasant, MI a town of 25K people, an hour away from a bigger city...instant deal killer?

-2nd biggest employer is Central Michigan college...good/bad?

-a mile away from campus, I'm sure that there are students and residents living there, any thoughts?

-84 units in 20 different buildings...a lot more R&M, capex versus one building?

-there are 6 vacant lots on the parcel to "build more units"...it is pitched as a benefit, perhaps it is not, will cost more in taxes, maintenance, insurance, etc.

-it doesn't say anywhere in the listing or OM, but there are a few more buildings in this complex that are not part of this deal, I'm assuming that there is association as expenses like landscaping, snow removal, etc. are not mentioned. Outside of the added expense to consider, are associations inherently bad?

-anything else that you see to consider when looking at a property?

After typing this all out I realized that I'm asking for a lot...so maybe just answer one or two of my bullets if you can. Thanks in advance!