Oak Lawn Dallas and High Interest Rates

[Sanjoy V.]

Hi there,

I am looking for advice on a current deal in Oak Lawn / Knox / Henderson area Dallas.

This is a small <45 probably class B, Boutique unit, which has been gutted and rebuilt, almost 90% leased in a very short time (although were given 1st month concession to fill the apartments). Almost everything is new, so probably not much upkeep.

Here are some of the questions I need help with:

1. Don't know what the property taxes are going to be? how do I calculate, should it be based on NOI and local cap rate? Will hiring a tax attorney help truly lower tax rate. Will the tax be based on purchase price?

2. Since it is recently leased there may not be much of T12 and expenses history, but since its a new and small property, is it reasonable to take 35% as expenses, instead of typical 50%?

3. What is the going cap in the area? and the rental increase that is expected? is it really going to continue to appreciate and have rental increase, with tons of apartments that are coming up? But most are going to be class A possibly and will be more expensive than a class B type apt and people could step down.

4. Trying to take mortgage amount without having the net worth equal to the loan amount. So I may get a 4.9% interest rate best with 25 year amortization, which will cut into the cash flow, but still may pay off more by 10 years and may even out?