Thoughts on 8 Unit Apartment Building

[William Eric Schaefer]

Hey guys I am looking for some advice (Funding ideas, rehab ideas, etc.) on this potential deal I have identified where I live. Some background on myself I am a new investor from Birmingham, Alabama I am also a United States Marine. My father is a pretty seasoned investor and this will be the first project I take on with him. He does mostly commercial office buildings, but he is not very experienced in the rehab side of real estate so I am hoping to get some experienced advice from my readers.

Here are some details I have gathered on the property: 

• It is an 8 unit apartment building listed at $227,000

• It has 6380 Sqft.

• 2 bed 1 bath per unit

• Built in 1960

• Current owner bought it for $100,000 in 2018
• Located in the lesser side of the city

• From what I understand the seller was in the process if renovating the property in which they finished the outside to include a new roof, paint, windows and some landscaping. However, they were in the process of renovating the inside where they gutted it down to the studs which is as far as they got and the property is now being sold as is.

• I figured that the rehab will cost anywhere from 100-150k. I am meeting a builder at the property to get a better idea of what it will need. 

• Rents in the area for similar properties are $675-725 per unit. Gross monthly income would be $5000 to $5800 per month. 
• Property Taxes are $940 annually

Here is what I plan to do with it if I decided to purchase:

• For financing I plan to use a construction to permanent loan
• Utilize section 8 since it is very common in the area
• Manage the property myself at least for the first year
• Purchase the property under a new LLC

Any advice I receive regarding financing, rehab, section 8 housing, COVID-19 apocalypse issues, or anything else would be GREATLY APPRECIATED!