All Forum Posts by: Huan Yang

12th st frontage

So the realtor just sent me this property info: Area around 12th and Indian school, class B neighborhood? Asking price 625k 10 units total. Rents are: One 3 beds 770 Two 2 beds 640 Seven 1 bed 540 Total per month 5640 Monthly utilities 1900 Individually metered right now the owner is paying all Insurance 2646 Owner will carry long term with 125k down. Not very familiar with Phoenix market. Doesn't seem like it's going to cash flow very well. The realtor says there is upside on rents and switching to individual utilities. Need advice! Thanks!

If I deduct 5% vacancy, 5% capex and 5% management fee, the cap rate goes down to 7.8 There is a ghetto motel right across from the property, one of those weekly rentals with sketchy tenants walking around. Maybe this property not so hot at the end.

asking price: 545k plus 19k whole saler fee:  564k

2015 profit loss:

total actual rent: 106,145

coin laundry: 4200

total: 110,345

advertising $211

annual fire inspection $136

A/C appliance replacement $2761

associations $210

insurance $5070

law care $1071

management $ 3840

pest control $ 2689

property tax $9455

maintenance and repairs $7924

utilities $16902

total: 49,459

NOI: 60,886

do these numbers look in line where they supposed to be? I know the management fee is probably too low.

There aren't many multi families available in Waco. The only things I found on loopnet are the ones close to Baylor university, cap rates are between 5-6. Albuquerque doesn't have much job growth, we have invested here for a few years, there is no appreciation. We don't want to buy local any more, unless there is a property with amazing cap rate.

I thought Waco is a hot market? It's hard to even get something under contract?

Yes we are planning to hire a local management company for sure. Most tenants we talked to during the inspections, were pretty happy with the units, they do have complains about the floors, bathrooms and the HVAC etc. most of them have been there for two plus years, only two units have tenants that's been there less than 6 months. If we do acquire the building, the first thing we want to do it to pass on the electricity bills to the tenants, and raise rents on the 2 two bed rooms. The electricity runs average $900 a month, and the two bed room units are paying the same rent as the efficiencies.

I was worried about the deferred maintenance will eat up all the profit. The seller has replaced the roof and painted the exterior. Nothing else has been done to the units for a long time. And it's out of state for us, not sure if we can handle it.

So this deal is as such: 545k, plus 19k to the wholesaler. 14 units of efficiencies, 2 units of two beds. 2015 gross was 101k, plus 4K from laundry coin machines. NOI was 61k, landlord pays all utilities for the efficiencies, though they are separate metered for electricity. Location c, class c. Rents are slightly lower than market. Efficiencies are charging average 550, two beds are at 575. Just did the inspections yesterday, no major structural or roof issues, but definitely deferred maintenance in all units, bathtub are in horrible shape, tiles falling off the wall, carpets are nasty and the floors are very old. Fridge and stoves seem to be in working order. Is this a good deal? Need to put an offer in soon. No room for price negotiation though. Thanks

we are about to get under contract with this 16 unit multi family property in Waco. Did the inspection yesterday, there are a lot of deferred maintenance, like the bath tub porcelain chipped off, tiles falling off the wall, carpets and vinyl floors in bad shape, HVAC units outside part got rustic, etc. the main structure and roof, Windows are in ok shape. Cap rate is at 11% on actuals. Rents are a 10% below market. Individual meters for electricity are available but not being used right now.

I was worried about all the fixing will end up costing too much money, will  turn it into a suckie deal.

Should we go with the deal? 

The location is c and the class is c.

Thanks!