Deal or no deal on apartment complex

[David Boroughes]

Looking for thoughts on offer price, I have an idea, but want to see what others think.

12 units apartment complex

asking price $1,000,000

Gross rents $100,000

Total of all expenses $35,000

NOI $65,000

down payment 25%

Finance 75% at 5% amortized over 25yrs

[Adam Sheren]

@David Boroughes what are going cap rates. Purchase price of $1MM with that NOI calculates to a 6.5% cap rate. After calculating debt service your roughly at 4-6% CoC (not great). If you could get for $850K and increase rents 10-15% with little or no cost to improve the deal looks much more attractive (12-14% CoC) Again, this is assuming the place is structurally sound and you don't foresee any Large expenses needed in next 5 years. Does your NOI include a reserve? You should add a 3-4% reserve as well. I hope this helps!