My first 12 unit... or maybe not?

[Tom Camarda]

Hello All, 

I'm putting this one out to the big brains on BP. This is a 12 unit apartment complex in Indiana. I live in California. I have been investing in TX for the past three years with good results and have been looking to expand to different markets. This one looks interesting, at least.

The building is on the market for the first time in 35 years. It is dated and a couple of the tenants have been there since the 80's...  There are two vacant units and there is also an eviction in place!

There are (9) 1BD /1Ba units and (3) 2Bd /1Ba units. The building is close to the University in a C+/B- area. Decent schools and good amenities. 

The Finances:

OK, I own another property outright and the bank is willing to use that property as my down. Therefore, no money out of pocket. 15year Am at 4%. However,  I would have to come up with the 25k in rehab funds.

Asking: 265K

Rehab: 25K

Rent: Avg $440 (10 of 12 current units rented)

Expenses: (2014 totals)

Advert: 800

Insurance: 3250

Yard: 580

Trash: 1240

Snow removal: 610

Reapairs/Maint: 11,100! (previous years were 13k and 12k respectively)

Utilities: 3800 (water, sewer, common elect)

Taxes: 6600

Prop Mngmnt: 12% (no lease fees or renewal fees)

Vacancy rate 10%

______

I look forward to hearing your thoughts and insights!

Thank you, 

Tom Camarda