6 Plex Advice

[Brian N.]

I am currently negotiating a deal on 6 plex. I would truly appreciate some opinions on what price range you seasoned veterans would be looking at on this property to make it worth my while from an investment standpoint.

6 plex completely rehabbed in 2007 from ground up.
100% occupancy.
GOI: $35,040
NOI: $21,400
*note* all expenses (taxes, insurance, utilities, maintenance, etc) were taken from sellers ledger. I increased them in my calculations to make sure I was covered.

I have the operating report for the previous 3 years and the numbers have not deviated much at all from the numbers stated above.

Also, what are your thoughts on negotiating the seller to carry a portion of the loan to minimize out of pocket expense as far as a down payment?

Financing either 20 or 30 years.

All thoughts/advice are much appreciated.

[Carl Schmitt]

I'm not an expert by any means but I know most of the experienced people use the 50% rule and then a 10 cap to get a starting point.
My quick math would be gross of 35,040, NOI would be 17,520. That's assuming tenants pay all utilities. So at a 10 cap it would be worth $175,200. In my area, nothing really sells a a 10% cap rate. Most are 14-16% here in Ma so be sure to check.
As far as financing, I do know that 6 units will be commercial. I haven't heard of any commercial lender that offers a 30 year term. 25 max as far as I know.
What are they asking for the property?