This will be my first multifamily investment. I am looking to be a buy & hold investor. I am in negotiations with the owner of a 13 unit apartment 1 block from the beach. The purchase price is $750k.
Gross Annual Rent is: $91,800
Expenses include:
| Property Taxes | $6,300 |
| Property Insurance | $6,000 |
| Water / Sewer / Trash | $7,200 |
| Advertising | $0 |
| Live in Manager Free Rent | $8,400 |
| 5% Repairs / Reserves | $4,590 |
| 5% Vacancy | $4,590 |
| Total | $37,080 |
As you can see above, there is a live-in manage who takes care of everything from painting, re-tenanting, collecting rent, etc. The current owner has owned it for 12 years. 75% of the A/C units have been replaced in the last 3 years. New roof in 2013.
I am in the process of getting financing from my credit union for $600k for 20yrs @ 4%. I will fund the rest as a 20% down payment.
Most of the tenants have been in place for 2+ years so there is very little vacancy even though I have accounted for it.
What do you guys think about this? What am I missing?
What would you differently?
