Real World Good or Bad Deal

[Jeffrey Bourque]

This is a current sale going on in my area. I keep thinking that deals like this are out of my world of possibilities because, 1 I do not know if it is a good deal, 2 how could I make it happen if it is a good deal?

Could someone break it down step by step for me and explain why yes or why no and if yes how would someone like me with little money get it done and profit from it.

10 unit multifamily investment

I look forward to learning from someone that has done it.

[Greg Scott]

Here is the short of it.

Does this look like a good deal?  Possibly. The rents are way below market.  If there aren't any massive physical problems with the property, it appears you can grow income and equity.

You might be able to buy this with little cash out of pocket if the seller owns it free and clear and was willing to finance nearly all of it.  However, driving rents higher will likely take a significant amount of cash to upgrade the units.  Given California's hostility towards landlords, you would also need enough cash to weather some long evictions.  In addition, you would need enough working capital to pay for insurance (which will be going up a LOT in Los Angeles) and to pay for property taxes.

Don't buy this unless you have substantial resources and a cash cushion to keep yourself safe.