First multifamily deal

[Rahul Bhatt]

Hi Guys,

My little introduction I am investing in real estate from last 5 years started with rentals. as of now hold 15 rentals units (all 1-4) here in California and Ohio. this is the first time I am trying to invest in a small apartment complex. trying to do for a long time but never seen an opportunity where numbers make sense. but this one seems to be decent cash flow. and also there is some value-add.

 I need some expert opinion who can let me know what is going on.

Location -- It is in SF bay area City called Richmond.

Price 1.25 MM Asking (we are under contract around the same price )

Unit mix we have 5 2-1 and 3 3-1

Current rent I $1400 and 1600 for 2 bd and 3 3bd around 12260 gross. all tenants are on a month to month lease. 

CAP rate on the property is around 7%

Expenses according to owner current expense look like around 5000 including 5% vacancy 5% repair   7% property management etc

My approach - just acquired a property and try to raise rents over the course of a year.

My due diligence 

1. I have done research on Rentometer and craiglist and called couple of people to know the rents can be raised 

2. the current owner bought this property for 630K in 2013 for 9% cap (I know it is  not relevant )

3. According to other people expenses on the water seems to be low. I am going to ask for all the actuals

4. we are going to do the inspection. 

5. Insurance I am going to ask my agent to prepare a quote

6. Hot water heater is common (3 of them)  might need to see exact age and try to find out if I can convert them

Here are details on my analysis

I need advise especially with multifamily investors in bay area 

1. Richmond as location (I live in Fremont)

2. I got some suggestion from experts and mentors about water being a bit low. I am going to verify it from actual bill. 

 Please let me know if I am missing something here. The first commercial can be really overwhelming :)

Also if you are in the bay area and would like to learn more about this deal please let me know,

Thanks for your help