8-Plex Analysis - Enterprise, Alabama

[Don Petrash]

Hello, BP! 

This 8-plex in Alabama looks like a great deal to me, and I'm interested in feedback from the gurus out there on the details.  Link posted below.

Each unit is 2 bed / 1 bath, renting for $450/mo.  The owner has not raised the rents in a long time - I could probably increase rents by $50 with no work, and $100-$150 more after some updating and repairs.  My agent did a walkthrough last week, and the units we saw were in good shape.  Looks like a single metal roof for the whole property.  2-4 of the A/C units are new; at least 4 are decades old.  The property was built in the 70s.  

The seller is asking $310k.  I'm planning to offer $300k.  Anticipating value add after 5 years to $400k.  (Valuing the property is where I could use some sage advice.  I'm not sure of the area cap rate). 

All tenants are on month-to-month lease extensions.  All units are occupied, and all tenants are currently paying (even during COVID). 

https://www.biggerpockets.com/...

Let me know if the link doesn't work, and thanks for your time! 

-Don

[John Patton]

@Don Petrash

What is the zip code. There are some areas are the wild Wild West. Some areas you need to arm yourself. The best way is to ride around the neighbourhood and talk to some utility workers and postman. These people know the streets in the area. Good luck JP