7 Unit Deal In Pottsville, PA Need Info

[Derrick Alexis]

Hey BP community,

So I have a few older mentors that are still very keen to cheap under $15k deals and one was sent over to me as a 1st investment idea in the Pottsville area.

It's a 7 unit apartment building that needs some work, just wanted to know if anyone has any experience? How is the rent market? I've heard that the area is good for cash flow. How well does the ARV work out?

Would leveraging any equity be possible to use a piggy bank sort of speak? I understand that units that are 5+ are evaluated differently as far as leverage being used.

Any help or clarification if I’m misunderstanding or even if this isn’t an area that apartments work PLEASE feel free to share

Thanks in advance,

Pretty nervous

[Salvatore Lentini]

@Derrick Alexis - Keep in mind, if you plan to finance it outside of private, long term money, you will have a difficult time.  Many lenders have $75K minimum loan amounts, which means the property has to appraise for $100K minimum.  And that's on single family.  On multi family it is often $200-$250K and sometimes a minimum amount per unit.  A 7 unit at $15K a unit will be a difficult property to finance.  Be careful about areas that are labeled "good cash flow"... it often means high crime, low income, and no one wants to or can afford to own property there so everyone rents.  Renters in those areas are very hard on properties and unreliable with rent.  There are pros and cons to all investment types and classes but "good cash flow" areas definitely come with their share of headaches.  And the numbers on paper are not likely the numbers you will experience in real life.