27 units in North Dakota - Good or Great Deal?

Question

The Deal:In a nutshell

Owner Financing of $1,350,000 6% 20 year AM and can refinance in one yearThats 11.67 % cap rate on actual -My Equity raise only $300,00027 units with mix of 7-3 bed 2bath, 7-2bed 1bath and 13-1bed 1bathHigh rents from $935 to $2250 but lots of value add. Rents in area much higher100% occupied with waiting listPro Forma with rent raise is $3,121,750Over one acre and a need for storage units in the area. Dropping some containers would also be a great value add. Other amazing opportunities with this property.

Zach Lemaster · Answer

Value add is always a great way to go. Those rents are rather high for the size of the units. If it is on the west side of the state (near Williston) I would be concerned about the sustainability of maintaining full rentals. If it's east side near Fargo or Grand Forks, then I would say you're good to go for years to come. Numbers look good on the surface however, especially with owner financing at those rates. Feel free to PM me or call to discuss details in private. Those likely have to be brand new units to rent that high.

Glenn D. · Answer

Zach is right - Location - Location - Location. North Dakota is a great state for investing but the ROI futures definitely depend on the location. The West end of the state (Williston area) has some major adjusting that it is going through due to the worlds oil market. Where is this located?

Cal C. · Answer

Is it in fracking territory? If so you might want to check to see how long the Saudis can keep pumping cheap oil.

27 units in North Dakota - Good or Great Deal?

27 units in North Dakota - Good or Great Deal?

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