Help Analyze 85% Remodeled Almost Vacant 8 unit and Build 8 More

[Ryan M.]

Hey all,

Long post. Questions at the bottom. Thanks in advance.
I'm still new to investing, as I only have 1 SFH so far. I was brought a pre-market deal of an 8 unit property (two 4 unit buildings) with the plan of adding another 8 units; a site plan was done previously. I believe there is more room on the property to add washer/dryer facilities and/or small playground. It is in an in demand school district and consistently safe town. I have only walked the property so far.

Property has been mostly vacant since at least Dec. of 2016. Six units have been remodeled about 90%; one unit is only about 30% but includes kitchen cabinets and appliances. One unit occupied. My biggest concern is the HVAC systems, the roof will likely need replaced within a few years, and the asphalt parking lot likely needing to be redone. Landscaping is also some concern. Exterior will require minor repairs.

Asking price is $225k. Built in 1968. Seven units are 2/1 about 725sq ft. Occupied one unit is 1/1 about 425sq ft. Only refrigerator and stove; no dishwasher or w/d hookups. Comparable 2/1 rentals currently listed are $550 and $575. Previous taxes were about $3725.

My initial questions are: Do I make a really low offer assuming I need to replace HVAC, redo parking lot, and replace roof? How would you estimate a cost of the future 8 units? 

Let me know if you want any additional info. Thank you all.

Ryan

[Ryan M.]

@Hai Loc Thanks for all of the info! I was finally able to get some better repair estimates recently. I plan on putting in an offer early next week!