107 Unit Portfolio Purchase Advice Needed

[Catia T.]

Hi everyone!

Advice is greatly needed. I am relatively new in my real estate investing journey but I am ready to dive in.

I stumbled upon a 107 unit portfolio sale spread out across up and coming areas of Philadelphia, Pennsylvania.

The owner is willing to seller finance and potentially with nothing out of pocket.

Here are the figures:

Asking Price: $10,700,000

Unit Count: 107

Units are all 2-4 bedrooms with 1 bathroom

Gross Monthly Rent: $108,023

Yearly Gross Rent: $1,296,276

Yearly Taxes: $96,390

Insurance: $39,390

Water and Sewer: $91,975

Repairs and Maintenance at 15%: $186,414

Property Management at 5%: $59,473

NOI Yearly:$695,486

NOI Monthly: $57,957.17

CAP rate: 6.5%

Cash on Cash Return Year 1: 6.67%

What are your thoughts? Seller is open to financing. I was even going to propose 50% of NOI monthly as a payment.

Not sure how to tackle this.

Any advice would be greatly appreciated.

-Cat

[Gregory H.]

Probably extremely overpriced class D real estate, and I'm guessing that "pro forma" is questionable at best. Incredibly savvy investors might be able to properly vet it & manage it to profitability, but those sorts of investors don't need to do seller finance. I'm not saying don't take risks, but you should have some ability to succeed with the risks you take, and you need a few years heavy experience under your belt before doing this. I manage a multimillion dollar portfolio, and I wouldn't get near this thing.