All Forum Posts by: William Pickett

 I am seriously looking into self storage, either buying one or building one.  Trying to get a grasp on where to start or who to talk to that would be friendly to noobie.  Have managed a few rental properties in the past and manage one now. Any links or help would be greatly appreciated. 

Hi there again, sorry been away.  How do you do mentions in forums.?

Update on the building. The bank came back and valued it around 481k. They want to see a DCR of 1.5 and I am sure they are factoring in the 10% vacancy. I know we were.

So do you go to the seller with that offer? or lower? Higher?  guess this is the one thing I haven't read about in the forums. 

Need some advice. I talked to the bank and they said based on asking price of around 600k with an NoI of 57k this place in a C neighborhood is almost 200k over priced? Just looking for other opinions and what are other people experiences?

If the owner supplies us with a proforma sheet for last two years how can we further verify rental income? 

Rental Income 115,975.00

Total Income 115,975.00

Gross Profit 115,975.00

Expense

Advertising and Promotion 520.00

Deposit Refund 775.00

Dues and Subscriptions 72.00

Insurance Expense 5,328.15

Repairs and Maintenance 8,059.36

SALARIES 10,985.75

TAXES AND LICENSES 9,293.00

Utilities 23,137.46

Total Expense 58,170.72

Net Ordinary Income 57,804.28

Net Income 57,804.28

This is what I have gotten from them.  This area is at best a C neighborhood.  Not really a crime area just blue collar mixed with some nice houses around it. 

The utilities is also part of the water and sewer that the owner pays. 

Guess we are confused on where to go from here. We are wanting a 10 cap for sure but I figured if lower income areas would generate a higher cap rate? 

there are 28 units rented out, one is an office and the other is under rehab. The collected rents of 10,900 is what they are asking for in rents. They are actually set that low. I am sure it is the cheapest I have ever seen.. They have slowly began to raise rents but they also still pay all of the water and sewer.  

How we are structuring it is still a mystery. Hence why I am here.  I know we would def pay our closing cost and any inspection fee or misc.  They said are willing to carry up to 20% of down payment.  

Still waiting for manager to get us the last 12 months rent rolls and preferably 24 months rent and taxes.  

1.How would someone structure this with little money as can be out of pocket?

I know that Is asking a lot but I would like to have cash reserves. 

Do you still value an apartment on what is is making currently or could be making? 

Thank you for the replies. 

The rents are low in the building. there is deferred maintenance of at least 30k.  

The owner is also paying the water and sewer bill. so for some of the one bedrooms they are getting 300 minus the water sewer so rent is around 240. There are not that many comps to compare to in this area. It is a small town. lets say less than 10 other apartment complexes in the entire town.  

We came up with NOI: 56,210

We have requested all the rent rolls and tax information. Hope to get that this week, also have a broker we have been working with.  Sorry if I'm not as clear in the post as I should be. Trying to get my head wrapped around this. 

1.If nothing close by has sold for awhile how would one figure cap rates for the area? 

2. what is GRM ?

This building is low income rents C- for sure. I don't need a gun too go check it out but its not a clean place either. Could be pushed up to C C+ if they had done the repairs and renovations. 

This is the first look and serious attempt and getting an apartment complex me and my partner have found. Confused on the numbers of course. Need some bigger pockets expert advise. 

Seller price is: 695,000         30 unit building built 1914

20% down payment seller may carry

Rental income: 10,900

Property taxes :9868

Property management: 10771

Maintenance and repairs yr: 11,381

Advertising: 500

Utilities 23,000

lawn care: 670

Average market rents in the area. C-B- area white collar 400 to 700.  mostly I see 575 for 3 beds nicer places.

this is a mix unit building 1, 2, 3  bedroom one bath. only  a  couple have laundry hookup.  Small laundry in basement.

Thanks for any experienced investor looking at this.  

How do we value the property? 

May be asking too much but around what would this cashflow per month on the 16 unit. Im really digging in the multi family and researching as much as possible right now.!! thanks!