First Multi-family Deal Under Contract (8-Unit)

[Albert D.]

Feel excited and nervous at the same time.  Never in the multi business before.  Any comments/advice on what to watch out for are welcome.  Many thanks in advance.

Here are some details:

10%+ cap rate based on 2015 actuals; 

Or 9% cap rate using a quick & dirty analysis (rules of thumb: 10% vacancy & 50% ops expenses)

Currently 100% rented, seller to provide tenants Estoppel at close and actual leases after LOI signed

100% cash deal; no financing contingency

Property sells "as is" with right of inspection (contingency)

Property managed by current owner for 10+ years; new PM will be needed as I'm out-of-state investor

[Albert D.]

John Casmon

Market cap rate is below 8% in the area. I'm getting a good deal by any count, either the current 13% or my over penalized 9%, unless I'm missing something here.

Value add: face lifting improvements and rate increase by 3-5% per year.