All Forum Posts by: Brad M.

I ended up passing on this one. After a little more due diligence on the existing leases and tenants, there were issues there that I would rather let the current owner sort out, and if it is still around later, I'll take a look.

It would have been an opportunity to negotiate a better price, but at this point, I would prefer these issues get resolved by the current owner, and I'll reevaluate.

Thanks for the feedback.

Complete hyperbole on my part Sharad...you are correct, of course. No immediate concerns. I guess I just figure as soon as I buy it, something is guaranteed to break!

I'm making an offer on a quad tomorrow. I understand that unless you are from my market of Richmond VA, you may have limited commentary, but wanted to put it out there for thoughts.

-PROS

1920's quad in an up and coming historic district of Manchester (south of the river in RVA)

All brick, renovated in 2007 (gutted to studs, new electric and plumbing)

$700 average rent per unit

Rents under market by 100-150. Grad school colleague is partnered with a guy that owns 40% of this neighborhood....he knows the rents and says this is under market. I agree based on my own research.

Asking price is $350k. Offering $300k, will pay $325.

Tenants pay all Expenses

Opportunity to raise rates - kitchens are below market, 2K will allow a 20% raise in rates

CONS

New construction - as an up and coming district, many new units coming on market. Same friend as above has an apartment tower with all modern amenities coming online next year, and another under way. My company has one proposed. Inventory is about to increase dramatically, but this is all new, expensive construction. It will be at the most a positive.

Current owners bought and renovated in the recession. We may be buying at a peak.

Since it was renovated in 2006/7, all infrastructure is nearing average replacement age. HVAC looks great, but given the age could fail any moment. As I typed that, it gave me resolve to stick to my asking...