All Forum Posts by: Joshua Uelmen

@Richie Thomas you forgot one big component being the expenses. If you take the asking price of 565,000*.07 (7%cap rate)=39,550 (annual NOI). Now you divide by 12 months and get your monthly NOi=3295. Now this is NOI. Assuming approximately 50% expenses on the property you double this number and then divide by 16 to get approximate rents. Obviously this is subject to actual expenses on the property. Your math was right. There was a bit of a mix up in terminology and you left out the expenses. Actual expenses on this property were a bit higher to actual rents were 375-400 per unit. Still close enough for a rough a litmus test. Hope that helps.

@Theo Holba Thanks for the heads up.  I will definitely keep that in mind. 

@Ryan Shannon After getting initial estimates, the numbers do not work for me on this property so I've decided to pass on this property. 

@Branden Edenfield Thanks for the heads up.  I hadn't even thought that the lending institution could require a specific fix.

@Nathan Gesner Thanks for the info.  Not used to the process yet so it's good to have other input.

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*This link comes directly from our calculators, based on information input by the member who posted.

Hey everyone, I'm looking at a 16 unit deal right now outside of Oshkosh, Wisconsin.  15 Units are rented at $400 and one of them (onsite manager) is rented at $375.  There are 2 - 8 unit buildings and all of them are 1/1.  With some updates rents could be pushed to $475.  For the area and rent my property manager suggested a reasonable price would be $450,000.  The long wall of 1 building is deflected about 4-6" from top to bottom (top pushing in).  The 4 external concrete stair wells need to be repoured as well.  Due to this my property manager suggested $410,000 would be a safe offer to start with the intent that we could counter to $425,000.  

I have a few items I'd like some input on for this deal. To start I'm concerned with the concrete work that would need to be done within a few years especially since the cash flow would be put towards repaying the HELOC I would use for the down payment. Secondly, I have no information on the lease terms as of yet. The realtor I am working with tells me we should make the offer now contingent on the foundation inspection and the lease audit. This feels backwards to me but I haven't done a commercial deal as of yet. It may be my engineer background getting the best of me but wanted to see what you guys thought.

Thanks in advance for your input! 

Some good information here.  Thanks for sharing!