Any Property Managers in Tucson, Arizona?

Question

Hello,

My name is Mike and I am looking to buy commercial real-estate apartments 5+ units. Most of the research I have done on the area was of 2 and 3 bedroom units. But I had someone reply to my direct letters with a 12 unit all 1 bedroom for 625K. The units are small at around 440 sqft. and rent is at 475. I don't know if this is a good deal. Any help would be appreciated.

Thanks.

Bobby Hosmer · Answer

Hi @Michael Furst

Great questions. From what I’ve seen, that’s on the lower side for comps. However, the units are pretty small compared to other sales recently. I’ve seen sales of 60k-75k. This pricing might make more sense since the units are around 400 sq feet.

With regard to rents, this also depends largely on the area of the 12 unit. These rents seem at market for Tucson, as spots can rent for around $1 per sq foot, just in general. But, the location is key for future increases or even appreciation.

There are managers who would manage this for you. Because of the size, you might be able to negotiate fees down a bit since it’s all in one spot. With 12 units, you have negotiating power for maybe 6-8%.

Hope this helps!

Michael Furst · Answer

@L. Pritchard

I hope I get it too and I will definitely share with you.

Apparently there are 2 other investors with offers that I may have to match.

I'm going to use a master lease agreement so I have a very small window of wiggle room. This weekend the owner will let me know if she is going in another direction.

L. Pritchard · Answer

@Michael Furst That’s very exciting. If the deal goes through I’d be interested to know the details if you feel comfortable sharing at that time. I’ve been in property management here for 13 years and am finally looking to own some rentals myself but haven’t taken the leap yet.

Michael Furst · Answer

@L. Pritchard

I am going to put a letter of intent on the property so I don't want to give any more info away. I used one of the property managers that @ Bobby Hosmer recommended me. He stopped by and did a video of the units that was very helpful and will lead to a change in my offer.

You bring up a good point about raising rents when the tenants are below the poverty line.

So much things to consider. I'll have 30 days of due diligence to come up with the best price.

L. Pritchard · Answer

Hi Mike,

I just saw a 6-Unit building listed about 6 weeks ago for $50k a door. It was similar to what you are looking at. All 1 bedrooms and from memory something similar to that 500sqft size with swamp coolers. I ran numbers on it at that time but I cannot find the listing anymore.

I first thought $50K a door was a steal until I drove the area and then started to really consider the small unit size.

I agree with @Bobby Hosmer on the $1 sq.ft rent range for C properties depending on the location.

That could be more like $1.25 - $1.30 for a desirable area and related amenities. Do you mind posting just the zip code that this property is located in? 85705, 85719, 85716 and 85712 are all areas where the average household income is at or below the national poverty line and expectations for high rent increases there should be had with caution.

Mike Furst · Answer

Thanks Tracy,

I used another site similar to this one but this one seems better.

Tracy Streich · Answer

NARPM is the National Association of Residential Property Mangers. There is a link on the page to find a PM. If they are a member of a professional organization like NARPM you have a much better chance at finding a good PM.

https://www.narpm.org/find/pro...

Not sure on the comps since is not my area.  Good Luck!

Michael Furst · Answer

Hi Bobby,

Thanks for the response. I figured 52k a unit was on the low end. It looks like you are right too about a dollar per sq foot for the rent. Which is too bad because of course I would want to raise it.

Do you have any referrals or recommendations for property managers? If I don't buy this property I intend to buy a different property in the area.

Michael Furst · Answer

Specifically my questions are

1. How much do 1 bed 1 bath units rent for?

2. Are there any sales comps with a 12 unit all one bedroom?

3. What are some good property managers and how much do they cost?

Any Property Managers in Tucson, Arizona?

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