Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 4 years ago, 11/02/2020

User Stats

65
Posts
24
Votes
Zane Belden
  • Real Estate Agent
  • Scottsdale, AZ
24
Votes |
65
Posts

52 Unit Multifamily: Buy or Bail?

Zane Belden
  • Real Estate Agent
  • Scottsdale, AZ
Posted

Love some feedback, thoughts, comments on this:

We have this 52 Unit under contract. It seems as though we are in a bit of a potentially unstable market when considering, Covid-19, Election, no evictions, population decrease in the county and state this is located. But the numbers still look solid....

Highlights:

52 units over 6 buildings. (46) 2 bed/1.5 bath townhouses and 6 apartment flat stye averaging 971 sqft. Brick exteriors, sloped, shingle roofs)

Gross Annual Rents: $408k ($654/unit/month). Gross Annual Expenses: $190k (prop taxes are $56k/year, trying to find out if they will increase substantially upon purchase).

Tenants Pay: Electric, Water, Sewer

Currently 100% occupied and we're told near 100% collections even though landlords are subjected to the no eviction order.

The Business plan: Purchase, cosmetic rehab 25 of the 52 units @$12,000/unit ($300k). Raise rents. Cash-out Refi.

With the property being 100% occupied, we will execute the 25 rehabs fairly slowly over 2-2.5 years and target the cash out refi in year 3-3.5 once rents have been pushed up.

So, the million dollar question: what would be a good price to pay for this property and should we buy it???

Other important notes: 

- We tentatively have financing in place: 4.25%, 25% down, 20 year amortization, 3 year balloon. 

- We only have $300k cash currently collected. Not nearly enough for both downpayment, closing costs and the $300k renovation budget (need about $1M).

- We have the option to buy less buildings/units if we can't secure financing for the complete purchase/can't come up with enough down.

-We have a seasoned/reputable Pm lined up to manage and we already own 40 units in the area over 3 properties.

Thanks all in advance for the wisdom and feedback!

Zane

Loading replies...