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Updated almost 6 years ago,
Looking to buy 8 unit apartment - rent roll provided now what?
Many of you have helped with questions regarding my first apartment deal. Here is one more...
- 8 unit apartment complex - owners daughter is getting ready to sell because owner is terminal. I made her aware of my interest I have good insight into the building.
- Apartment is all one bedrooms currently getting 400-500/month. She is already under market value - we feel with minimal cosmetic investments (5K / unit) that we can get rents in the $700 range as tenants turnover.
- I dont have all the costs yet but I did ask for a rent roll. Looks like this thing has been very mismanaged, only in the last couple months did they fill some empty units just before listing.
Now that I have the rent roll now what? I am meeting with several of my commercial lender contacts this week to discuss options. I am not sure if she is willing to owner finance some of it but I will likely present her some scenarios.
Can you review the rent roll below and tell me how I can use this information to make an offer? I cant really calculate cap rate until I get water/sewer/trash/repairs. All I know is unless they have a very low mortgage this building must be losing money based on that rent roll.
2018 | |||||||||||||||||||||||
1609 | January | Feb | March | April | May | June | July | Aug | Sept | Oct | Nov | Dec | |||||||||||
#1 Vac | 375 | 375 | 375 | 375 | 375 | 375 | 375 | 375 | 0 | 0 | 0 | 0 | |||||||||||
#2 Frank | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | 480 | |||||||||||
#3 Vacant | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||
#4 Chris | 385 | 385 | 385 | 385 | 385 | 385 | 385 | 385 | 385 | 385 | 385 | 430 | |||||||||||
#5 Angie | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 93 | 475 | 475 | 475 | |||||||||||
#6 Kathy | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 348.26 | 475 | 475 | |||||||||||
#7 Dave | 375 | 375 | 375 | 375 | 375 | 375 | 375 | 375 | 375 | 375 | 375 | 425 | |||||||||||
#8 Nick | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 475 | |||||||||||
1985 | 1985 | 1985 | 1985 | 1985 | 1985 | 1985 | 1985 | 1703 | 2433.26 | 2560 | 2760 | ||||||||||||
2019 | |||||||||||||||||||||||
1609 | January | ||||||||||||||||||||||
#1 McKay | 116.67 | ||||||||||||||||||||||
#2 Frank | 480 | ||||||||||||||||||||||
#3 Vacant | 0 | ||||||||||||||||||||||
#4 Chris | 430 | ||||||||||||||||||||||
#5 Angie | 475 | ||||||||||||||||||||||
#6 Kathy | 475 | ||||||||||||||||||||||
#7 Dave | 0 | (*Out of work Teamster. Back to work in February and will catch up.) | |||||||||||||||||||||
#8 Nick | 475 | ||||||||||||||||||||||
2451.67 |