What should I offer on this off-market multi-family lead?
I have an off-market lead on a mixed multi-family property in Harrisburg, PA. Unit has 5 residential units and a retail beauty salon. Owner self manages and wants to retire and move out of the area. Owner is asking for 750k, though valuation from my calculations is about 736k. Their realtor previously suggested 800k listing price. Harrisburg is a flat population and hasnt grown in the past 15-20 years. Owner will consider seller financing. I've calculated possible 700k loan and 50k down as a hypothetical and get just about breakeven cashflow after debt service. Owner states they've kept rents low to avoid paying additional taxes (but we know thats BS). He does have some long term tenants that he has not raised to keep up with market. There is some value add through renovating unrenovated units and increasing rents, but just a smidge... This would be a out of state deal for me so I Would be having it professionally managed, but oversee it remotely.
What would you offer on it given the cashflow or NOI shown below? I wouldnt buy it at 750k because it doesnt cashflow, but wondering what you would do. Could I buy it with the breakeven, increase rent, re-stabilize and then force appreciation and then flip/sell?
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