What to expect for $1.5-2.5M buy price in apt complex.

[Michael Bender]

I'm looking for feedback on two items. Expectations on what I can get, and experience needed to execute.

I have two scenarios. I'm selling one property and cash-out refinancing 3 others for a total downpayment of ~$350k. If it makes sense, I can probably sell all SFR and have a downpayment of $650k assuming I can get it done within the 1031 timeframes.

1) How many units/doors roughly should I expect out of a $1.5M or separately a $2.5M property? Location agnostic, I'm in NC so I would love to keep it over this way if possible, but not a deal-breaker.

I definitely need the building to afford property management. I don't want this to be my day job. I'm just looking to upgrade from SFRs into a property that cash flows. I'd love opportunity to put in equity (I know how to do construction, GC projects, etc...), but would look at that as the upside. I mostly want cash flow to supplement income with minimal distraction once the deal is done in order to grow my startup business (not real estate). Is it reasonable to expect 5-8k/mo of cashflow with minimal involvement in a property that had upside potential to force appreciation if I put in work? Banks like me so financing should be straight-forward. 

2) What experience do I need to acquire or find outside of a solid property manager to limit my risk? What would be your top concerns for someone with only 4 years of 3 SFRs landlord experience jumping into the property afforded by either option stated above in the first question? 

I'm not a stranger to working on homes. One of my rentals was a foreclosure in terrible shape I rebuilt myself. I don't want to do this work, but I'm open and comfortable being GC. I've run my own business for 12+ years so feel comfortable managing contractors/teams to get results. 

[Evan Polaski]

@Michael Bender, this is really a quite open question.  I have seen 19 unit vacant buildings in a B-C neighborhood in Cincinnat trade at right around $1mm.  Several units were gutted, the rest needed gutted, and exterior work had been done.  I have also seen a 24 unit, relatively similar property trade for $625k in a slightly better, but overall comparable neighborhood. Exterior work needed performed, but units were mostly rented.

What you will get in downtown Raleigh in the hot neighborhood is going to be vastly different, in quality, size, and cap rate from what you will get in small town NC, or anywhere else in the country for that matter.  

If you are open to recourse financing, and the banks like you, as you say, then financing should be fine.  With larger properties, there are just more people involved.  More tenants under the same roof, outside management, likely getting into slightly more specialized construction for capital projects.  You have commercial permitting for construction work, etc.  

Finding a good property manager will mitigate a lot of the risk, and I would try to bring them on sooner than later.  They can often provide feedback during your due diligence to help you build out a budget and keep an eye on potential pitfalls that could arise.