All Forum Posts by: Stefan B.

@Max Taylor

Total GRI would be $177,600, so $4000 x 24 units = $96,000 which is slightly more than 50%.

I ran my numbers at $4k/unit, even though my broker was doing the calculations with $3k/unit.

So running on the conservative side of the numbers, yet knowing all the deferred maintenance issues would you come in at $900k, or below that? 

Thank you for taking the time.

@Jennifer Rysdam

I absolutely love that it has so much deferred maintenance (I've done more than 30 single family rehabs) , I just don't want to pay top dollar for something that needs so much work. I clearly see the common thread in everybody's answers here, so I will name a price, and see what happens.

What was the asking price for the 8-plex?

Thanks for your input.

@Andrew Johnson

Hey Andrew, so I am only going to buy on actual numbers, but what's holding me back, especially when it comes to making an offer is that it seems like there's quite a few unknowns in the cap ex department. I've had my GC, and my HVAC guy drive by the building today, so I can get an idea of what it would potentially cost to fix all the deferred maintenance. The property is not on the market yet; since I cannot find anything that makes sense around here I've asked my broker to expand the search area 1.5 hours drive out of St. Louis. One day after I asked him that he showed me this one.... Coincidence?

I do agree with your "high anchor position" though.

Thanks for replying. 

@Nick Paul

So if I were to renovate the units (they are in serious need of rehab) I would probably be able to increase the rents by $20-$30 only to be at market value. I will stick to my numbers only.

Thank you Nick.

@Sant li

You are right, thank you for taking the time to reply.

Thank you Patrice.

Hello,

I live in St Louis, MO, I own 9 units, and looking to scale up.

I am currently looking at a 24 unit property, asking price 1.1MM. The property has lots of deffered maintenance issues as the owner self manages a 400 unit portfolio. I am talking 10+ years roofs, 15+ years AC units and water heaters, landscaping is pure dirt, and the 2 units that I looked at are in serious need of repair, like new baths, kitchens, paint and flooring.

Based on my calculations using the BP calculator and Jake and Gino's, in order to make sense of this deal I should pay no more than $900k in order to achieve 10% COC, 1.34 DCRS, and a cap rate of 9.1%. These calculations take into account a $4,000/unit/year for expenses. There is not much room at increasing NOI as the rents are about $20/unit below market.

My question is should I come in at a lower price since I might have some serious cap ex expenses in the near future?  My broker says that even $900K is low. As of right now the property is not on the market, so I am not sure as to how much I should offer in order to avoid a retrade scenario.

Thank you in advance for your input.

@JackBobeck. Thank you Jack, I will definitely give them a call.

@DavidMoore - David, I bought my first rental in 2004, and never had a claim till 2016. I also try not to get insurance involved, unless it's smth major. I guess I should not even do that:) Thank you for ur recommendation.

@JasonBott. Hi Jason, I was not aware that they looked at it like that. Since that's the case, it makes sense. I appreciate your input.