28 Unit Row House Building

[Matthew T.]

Hi, so I'm starting to do research on moving into smaller apartment buildings when this one caught my eye. I have a few SFH rentals, but no multi families.

It's a 28 unit row house building. Built in 1889. The exterior of the building is in good condition, all brick, wood in good condition. A small handful of windows that need to be replaced. Only 8 units currently rented and the rest need varying degrees of remodeling. At least 4 more could be ready in a week. All units are 2 bed 1 bath and can rent for $450/month, maybe a little more. The units are all large apartments, some may be able to convert to 3 bedrooms. Only street parking, but it does have an interior courtyard that could potentially be parking for 8-10 cars. It does have a central laundry area as well. 

Asking price is $245,000. So 20 units need remodeling, but a small handful only need paint jobs and some minor work, while 10 of them need completely remodeled.  I've done remodeling before, but for a project on this scale I'd likely contract out much of the work. Do you guys have rough estimates for remodeling 850 sq ft 2 bed 1 bath units. I plan on remodeling them toward the lower end, nothing fancy. 

Income $12,600. 28x$450. Not including laundry income. I could see us getting $495 for the completely remodeled units, especially if we add the additional parking. The location is downtown on a fairly busy main street about 3-4 blocks from major employers. 

Annual taxes $6,000

Insurance $7,000 ($250/unit)

Maintenance $28,000 ($1,000/unit)

Utilities $16,800. Water and trash. 

Vacancy $7,560 (5%)

Capex $15,120 (10%)

Contract services $4,000 (pest control)

Management $7,560. I will self manage, but saw that most people recommend calculating this anyway. 

I based my numbers on research done through bigger pockets. The taxes are based on the sales price. Due to the age of the building I put maintence at $1000/unit. 

I try to be fairly conservative, I hope to get higher rents and hopefully maintence will be lower. It will all be personally financed. I may have to take out an equity loan for the remodeling.