Tucson Apartment Deal: Help!

[Trudy Pachon]

Hi all,

So we went to Tucson over the weekend to look at several MHPs and our broker showed us an apartment building that we thought was a good deal. We ran it through the calculator, and it looks OK, not great, but OK. 

This will be our first apartment building and we are hoping for a turn key type property since we both work. We simply can't deal with a fixer upper at this point. We barely made it to Tucson and back!

Here's the stats:

10 2bdr.

1 1bdr. 

Rent on all units is about 595. They are single story duplexes with small back patios and front common ground. 

Price: 495K

Amount needed to rehab: We are guessing about 12k for cosmetic landscaping and signage. Units seem to be in good shape. Several recently remodeled. Poor management seems to be an issue here. Four units were available when we viewed the property, but we couldn't reach them all weekend. Maybe they don't work over the weekend? 

Loan: 4.75% with 25% down. We are trying to split the loan into four loans because the duplexes are on four lots. So we can get the residental rate.

We think there is potential upside with better management.

What do you all think? How does this deal look to you? Thanks so much for any input. We are a bit scared to move forward with our offer.