All Forum Posts by: Joel O.

@Joel O. 20% can be done. Title mus t be in LLC.

@Joel O.   At that price it would be as-is.  I know the previously buyer over paid for the property and likely won't take an offer for $250K.  But from walking the neighborhood $250k is beyond fair given the amount of rehab needed. 

@Joel O.  I live in Atlanta, only 15 mins from this property so if you need boots on the ground I would be more than happy to help with what you need.  

I was thinking offering more around $250k-280k given that this would be a complete gut job on the inside and roughly  $50k  in landscaping, creating parking etc.  The property is vacant. 

I'm actually in Charlotte ( Uptown) a lot for work. Maybe we find time to grab a coffee? 

Again, thank you for the help. 

@Joel O. Thanks for the input. I didn't think to use rentometer. I will rework the numbers using $800 for rent. 

What would you offer on the property? What calculation do you use to find max offer price?

Good morning all, 

I apologize for the long post. However, I am analyzing a small apartment complex and the numbers seem to workout but I feel like I am missing something. 

Property background: 

The property is located in a great location but not so great neighborhood. Less than 5 miles from downtown Atlanta, Mercedes-Benz Stadium, and multiple colleges. There more vacant properties in the area.   This specific property is listed through a broker and has been on the market roughly nine months.  The property is vacant and would need a full rehab inside and out.  The broker has the property listed for $349,900.  According to the broker, there are 12 units but the property records show it's only a 9 unit. After doing some research and calling around to other apartments in the area rent estimates are around $569 for a 1/1. This seems very low to me given the other apartments in the area are older and haven't been renovated. 

The asking price is $349,900

I've estimated $150,000 for rehab cost. ( $100K interior and $50k on exterior landscaping)  Cost could be a little higher given the issue that there is currently no onsite parking. 

So, running my analysis using only 9 units here are the numbers. 

Purchase Price of $350,000

9 units renting @ $569.00

Annual rent= $61,452.00

Operating Expenses= $ 23,565,60 ( Includes: Vacancy, taxes, Insurance mgmt, maintenance, Reserves) 

** I plan to self manage the property and perform majority of the maintenance work that's within my scope of abilities** 

NOI= $37,889.40 ( annual)

Also, I did the calculations as a cash purchase. Disclaimer, I do not have the cash to purchase the property so, I would more than likely be looking for equity partners. Any advice is greatly appreciated. I am hoping to buy a property in the new year. 

I feel the property is extremely overpriced for the condition it's in. Does anyone have a easy way to determine Max Offer Price?

A couple of points.

Fairfield - the city is bankrupt. It is busy because of the college that is hidden in it. Miles College. Very few investors will touch Fairfield. It's not investor friendly given the police ride around looking for crews to fine to generate revenue for the city.

The hospital - formerly Carraway hospital. For all intents & purposes UAB put them out of business. It's in an area called Norwood. Norwood is an opportunity zone that was included in the tax cut bill. Norwood is also a historical district. I pulled an electrical permit a couple of years ago. An hour later the supervisor from the power company & the city showed up & shut the job down because I didn't have a building permit open. I needed power first before I started renovating but because it's a historical district I had to give a full scope of work for a building permit before I could do any work. The house wasn't on the historical register, nationally or locally, so I did it right but government bureaucracy won out. No one would touch this area because of it & a couple other reasons. If you search the land bank for tax properties the city owns you will find many in Norwood. It's not a coincidence.

North Birmingham is our worst crime area so very few go there. 

Homewood is the suburb directly south & wasn't designed well. It's an infill city with 2 lane roads that can't handle the population or the pass thru traffic to more populous suburbs further south. 

Downtown Birmingham - people park in parking decks or take Uber to the city from the suburbs. There are cranes everywhere. It is far from a dead or quiet city. It has what many call one of the best unknown food scenes in the country. Multiple James Beard winners. Avondale & Lakeview are your bar scenes. Southside is a hodgepodge of bars, restaurants, & hotels. 

The majority live in the suburbs. The city only has between 200-250,000 people living in the city limits. Homewood is the smallest suburb south of Birmingham. It's 5a I think. It may be 6a now. All other suburb schools are 7a(highest classification).

Friday night on espn2 will be a football game between 2 suburbs of Birmingham. The school they are playing at is new with a $100m price tag. 

Also, if you drove around on Saturday, you likely didn't realize this state watches football. Birmingham has the highest TV rating every weekend for football. It's 24/7/365 here. If you really want to see a ghost town come during the Iron Bowl. No one will be on the road. You will also likely get cussed calling someone during the game ha.