Hi Thomas,
Thanks for posting the links. I see this is already pending, so this is most likely a theoretical conversation at this point, but that can still be beneficial!
Overall, I can see that this has a higher cap rate than the average that we're seeing in the area, so that's good. Know what metrics you're looking for before you invest - I want to see at least a 10% return personally.
First thing to note is your estimates for the rents average at $1300. Two of the units are only 500 SF, so the rent rate of over $2/sf is well over average for the area. If you get it, you're likely at the limit and risk high turnover (which long-term can mean lower income). Something to look at for future deals.
The second thing I saw was your expenses are potentially low. A 5% management fee might be something you negotiate for monthly maintenance, but possibly doesn't account for the annual lease renewals or new lease negotiations. When doing this type of pro-forma, it's better to over-estimate a bit so there's room for "surprises" rather than under-estimate and get hit with lower returns.
The last thing I look for is value add opportunities. This rental is pretty much turn-key, which is great for future maintenance reserve planning. There's potential to add paid laundry or extra storage facilities in the unfinished basement - which might increase your returns a bit. Could the space above the carport be turned into a community space or gardening area, which would add extra appeal to renters (justifying the higher rents)?
So, seems like a good deal, but make sure the numbers actually work for your investment goals. Look for the extra income opportunities, and have a set of must-haves for your deals so you can jump on opportunities instead of making emotional decisions!
