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Updated over 4 years ago,
6 unit commercial deal/distressed properties
Hello BP! I am working with a partner on a deal to acquire 3 distressed, vacant duplexes on one plot of land. It may sound weird, but these properties are assessed as one entire unit. Each of the 6 units has 3 bed/1 bath 1800 sq ft. The comps for duplexes in the area post renovation are around 285k. The seller wants 350k all in. I have worked the BRRRR calculator a few times and want to know what are some other factors in commercial deals. We want to acquire at 275k and raise value to roughly 675k with a Reno budget of 175k. After using the calculator the cap rate was over 25%, when applying rents and expenses. I know there isn't much info I'm providing, but is there something we aren't factoring in? real estate taxes, maintenance, insurance, water and sewer, vacancy, repairs, and self management. NOI is at nearly 78k while rents bring in roughly 101k. Also, looking for how a commercial appraisal would address a cash out refinance.