Hey, guys. I realize I'm way behind on the response here, but I wanted to thank each of you for contributing. This deal never came to fruition because the owner's eldest daughter decided she wanted to maintain the rentals her father had acquired over many years, at which point the listing was terminated.
@Anthony Dooley - Great pointers! Thanks for piecing together an offer, as requested.
@Andrew Johnson - Excellent observation. However, I can in fact use the percentages with this kind of property because the information I plugged in was provided by the owner and collected over many years of extremely detailed recordings (he kept literally everything, it was insane). Ironically, the property's entire roof had been replaced less than 3-years ago; all HVAC systems were less than 5-years old, apart from one which was 8-years old, each having been serviced yearly like clockwork with documented proof; only appliances that I believe were included in-unit were microwaves (no surprise w/ rent this low), although the necessary hookups were readily available for tenants who wanted to bring in their own appliances; and I know at least one of the buildings had concrete floors. These units were adjacent to one another, not all under the same roof (yes, when I said the entire roof was replaced I was referring to each individual standalone structure, so all). As for the tenants, over half of the tenants were 8-10+ year occupants. Most of these folks were between 50-70 years of age, and had their own little gardening "happy space" that they would spend a lot of their time in, weather permitted. Quiet, respectable people leading simple lives on a set income and their rent payment on direct-deposit. You could call it a makeshift retirement home if you really wanted to. They did. When turnovers did occur, the landlord (typically, and yes I saw these) had a "waiting list" with names and numbers of individuals he had "pre-vetted" as he put it, who were waiting to fill spaces were they to become available. He's a well-respected and well-known man in town. It would be my job to fill those shoes and run things accordingly, while maintaining the same reputation as a nice place to live. Also, the $5,000 turnover expense you slipped in there wouldn't even remotely begin to apply to a property with rent this low, which you previously acknowledged. But nice try ;P
@Jeff Kehl - Appreciate the offer you conjured. Wasn't really trying to go 007 with the concealment of the purchase price. Seeing as it says an even $1,000 I'm pretty sure I just threw out a number within the ballpark. If anybody wanted to break it down, they're more than welcome to. I agree with you on the tax subject, and hadn't had an opportunity to dig any deeper at the time this post was created. Personally, I do not care what the tax assessor thinks from that perspective; I care what return I'm seeing, as should be the primary focus of any investor. If I'm being honest, I'm thinking the old man (over several decades) haggled the price down with the city officials, whom he'd known for a lifetime, to lower his taxes and up his cash flow. The property had already been walked by a GC and I had been supplied with a breakdown of what needed to be instantly remedied, as well as what was to be expected down the road. An inspector would have obviously been involved, as well, if the purchase had been pursued further than it was.
Again, thanks to everybody for chiming in. Always helps!
