All Forum Posts by: Mehdi S.

Spoke with a Property Management company and they advised to increase Property Management Expense to 9% and include 8% for vacancy. Awaiting on the Insurance quote and the Property Manager and Insurance people like the location. With the extra fees, the expenses now represent 35%. Once I plug all of it in, I'll see what it'll really cash flow at. 

I would have to agree 100%. I typically multiply Gross Income by 40%-45% for the expenses to be on the super conservative side. I love to get a property with a clean 10% cap rate. I'm certain there are out there, however everything in Virginia, Maryland and Washington DC usually trades around 6-7% Cap Rate. By the time you plug in the real numbers, that's what I see them go under contract at. It's more like buying a Bond at these rates. You may also buy stressed multi-family buildings in cash, do a full gut renovation, lease up then get a loan on it. 

Aside from Tax Expenses, Insurance, and Management fee what else would you look for to add into the expenses? What would be the Top 10-15 expenses to always include in a Multi Family? Looks like this building is fully metered separately so the Utilities are on the tenants. 

From my understanding, the 3 buildings have been self managed by the property owner. I asked the agent why the Property Management Fees was subtracted and not added. Awaiting their response. Adding it as an addition to the expense, it looks like overall expense is at 20%. As far as comps, there are currently 55 Multi Family buildings for sale on Loopnet, Crexi etc... They all seem to be trading around the same price. 

Dear Friends, 

I wish everyone is stellar. I'm looking at three properties packaged together in one Street. They are located in Baltimore, Maryland. The three properties combined have eight total units which are 100% occupied. There is no value add here as all properties have been gut renovated in the years 2014, 2016 and 2017. The appliances are stainless steel, the units have hardwood etc... It's more of a turnkey deal. Attached you can see the Property Details, NOI, Three Year Cash Flow and Rent Roll. The asking price is $1,100,000. Below are my questions. If you have some questions for me or thoughts aside from the questions, please do share.

1. Investors in Baltimore Maryland, what is "CHAP TAX CREDIT"? It's only applied to one of the three buildings and how come the other two don't get it? By getting this Credit, are there any obligations to put forward? 

2. The building is very old from 1880. What do I need to watch out for? 

3. What is an accurate Management Fee Percentage for such building in Baltimore, Maryland. Their assessment is based on 6%. 

4. What would be accurate Vacancy % in Baltimore Maryland. Currently they are at 5%. 

5. Given there is no value add, it's simply as if I'm buying a "bond" in terms of the return. Tax assessment is only $429K as well. What would you offer for it to be worth your while? 

That is correct. I do see quite a bit of Multi in Richmond. At any given time, it's only 5-6 available inventory on the sites. 

Hello, 

Anyone here specialize in Multi Family ownership in the Northern Virginia, Virginia, Washington DC & Maryland. Specifically with 15+ units and in the $1M to $2M range. It seems like there aren't that many opportunities available to acquire or I may be looking in the wrong websites. I check Loopnet 3-4 times a week and don't see anything promising. Any suggestions are welcomed. 

Thanks, 

 Would love a B property & tenant with 7-8 Cap. Unfortunately not much on loopnet. 

 It doesn't help when "Adjustments" / "Attorney Fees" and "Court Fees" are the top line items under "Income".  In Northern Virginia we don't have that many Multi Family properties. Also lots of cash here so the top quality items sell privately without hitting Loopnet etc... What's left over on Loopnet are examples as above. 

My justification of D is based on a huge Juvenile center two street down. 

Hello, 

What are your thoughts on the following structure below. I've also provided their Trailing 12 for your viewing pleasure as well. Based on absolute $0 negotiations and with 25% Down payment, the loan would be $1,488,750. This loan financed for 30 years at 4.25% would be $87,888/Year. Subtracting the NOI of $147,000 - $87,888 would leave cash flow of $59,112/Year or $4,926/Month.

Asking Price: $1,985,000 

NOI: $147,000 or 7.50% Cap Rate

Units: 64

Location: D or E

Tenant Type: D or E 

Thanks,