16 Unit Evaluation - Cashflow w/ 100% financing?

[Scott Hensley]

BP Community,

I am seeking information and guidance from the wealth of experience we have available here. I am fairly new to the real estate investing game and am constantly trying to learn more. Here is where I need some input.

I have come across a pair of 8-plex’s that, on the surface, appear like a good opportunity. I am here to reach out in hopes of gathering more information, input, and advice when evaluating these units. I believe I have covered the basics in my initial evaluation but want to make sure I look at everything that’s pertinent for this type of property. I could also use direction on the financing side since this will have to be a commercial loan. I think that the cash flow may still work with a commercial loan and a second to take it to 100% (if it’s even possible).

The basic property information is below.

16 units (2br/1ba) - $758,000 ($379k x 2) (List price)

Rent - $9,600-$10,400 ($600-650 estimated based on comps)

Tax - <$2,000/yr

Utilities – Appear to be metered separately based on pictures

Lawn Maint. - $50/mo (little yard/landscaping)

Insurance - ??? Calculated based on $600/month (I assume this is very high)

Vacancy – 5%

Repairs/Maint – 10%

Cap. Ex. – 10%

Mgt. Fee – 10%

The property was purchased in 2015 for $150k and appears to have been renovated recently. There are only pictures of one unit and the floors, counters, etc are updated.

What are some things I may be overlooking or other areas where I might be surprised? Does anyone have any advice on financing for something like this?

I look forward to the input!

Regards,

Scott Hensley

[Stephanie P.]

@Scott Hensley

75% loan to value is normal for loans in my realm and the max cltv is 80%.  No one is going to do 100%.  If they do, please have them call me:)

Your swing in value for the property,unless significant improvements have been made, will raise eyebrows as well.  Everything else looks reasonable although you should calculate your gross rents at about 75% to account for vacancy loss.

Stephanie