REO 5 unit for Sale -

[Francisco Ycaza]

Hello Forum,

There is a 5 unit REO in Pittsburgh that is listed at 79k and I would like some assistance on making the an offer on it . I have Agent who is working with me and today she visited the property for me.

Details:

- 5 units

- 2bds/ 1 bath each.

- 1 unit is occupy only at $650.00

- Cap Rate is 10% from Listing details.

- 8 car parking in back .

- Separate Electric/Gas Meters tenants pay .

- NOI $7,900.00

- Tax Assessment $163k

Needs rehabs, kitchen and bath, Need newer window. Mechanics. Didn't see boiler. Floor ripped up in one bedroom. No copper. Ceiling looks OK...

Roof: too much snow

Rehab Cost :

-$8-10k for Kitchen / bath / Paint / floors per unit .

- New boiler/Furnace $5000

- Water Heater $2500

- New windows $5000

- New Plumbing $6-8k ?

Rehab Cost 70k

Analysis

- Gross Rents Income $3250 Monthly-USING MARKET RENT $650

- Vacancy 3% - $1170- annual

- $39,000 annual Rental Income .

- Expenses 50%

- NOI $18,915

-60k Purchase and 60k Rehab cost .

- Commercial loan $90,000

- $25K DOWN PAYMENT

- 7% IR

-30 yrs term

-$6300 DSCR ANNUAL .

So basically at $120k acquistion and rehab would this offer be justify ?

My DCR seems well above the 1.20 benchmark what Commercial lenders

are looking for . I try to put all the info that I currently have on this property and need some feedback because I have not done a deal like this before .

Thanks,

Francisco

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