Analyzing Multifamily in Dallas Texas area

[Nancy H.]

Hello,

I am a frist time invester and I have a opportunity to invest in a 103 unit property in the Dallas Fort Worth Texas area.

I would like to accomplish good cashflow and to leverage the property later to invest into another unit. I would like a little feedback and see what you think about the deal.

Property is a class C

Purchase price = 3,725,000

103 units @ 600 month rent w/ all utils paid

NOI 284,801 @ 5% vacancy

NOI includes Management @ 5%

Debt service 120,000

Expense @ 65%

CAP rate 6.95%

[Seth C.]

Check on rent concessions which will drive economic occupancy way down. 3 months is way too short for proper vacancy analysis, and you must be wary. It is classic to offer free month's rent etc to increase occupancy and then sell right away before vacancies normalize, so you need to have better numbers and a value-add plan in place and funded before moving on this. Don't pay for your own work, and insist on a longer trailing period for NOI/purchase price calculations. My 2 cents from my own research as another new investor.