First Possible Muli-Family Purchase

[Scott Littlefield]

So, I am considering my first multifamily deal. Ive done several single family, but my first multi. This is a 3 unit in a C+ class neighborhood. I built myself a calculator to analyze deals and I wanted to run this property past you. My main concern is just the lack of actual cash flow after all hard and soft expenses are built in. I have not yet physically looked at this property, I will be looking at it tomorrow. The rents should be able to be raised. All three tenants are MTM and appear to be 25-35% below market value. However there may be a good reason why that I don't know about. I think all three units would need rehabbed to get maximum rent even though some smaller adjustments could be made without rehabs. See my calculations below.

[Rahul Punj]

I think there's always a good reason for why the rents are lower than market including: older building, older unit interiors, the specific neighborhood or the lack of amenities in that specific property compared to other 'market rents'. The question you need to figure out is can you bring this property/units to be comparable to other similar properties and how much it would cost to do so.