Hey BP community,
I have been watching a few deals in a college town I live near. The Cap rate for these places are passable but not stellar.
Offering Price: $860,000
Projected NOI: $50,750.25
Estimated CAP Rate: 6%
Number of Buildings: 1
Number of Units: 8
Building Size: 8,402 sq. ft.
Land: 17,331 sq. ft.
Year Built: 1996
2 BR Unit Size: 766 sq. ft.
3 BR Unit Size: 1,228 sq. ft.
4 BR Unit Size: 1,441 sq. ft.
Projected Income:
Rental Income: $93,960
Concessions: ($2073.02)
Fee Income: (2016) $7868.42
Total Income $99,755.40
Property Taxes:$11,062.00
Insurance: $3463.42
Repairs/ Maint. $15,642.55
Utilities & Cable: $1,854.50
Misc. Expenses: $2,294.76
HOA/ Management: $8,267.40
Total Expenses: $49,005.15
Net Operating Income: $50,750.25
Rent Roll
MONTHLY
TOTAL:
$7830
The Issue I am asking about is that there is a 600 Unit apartment planned for a block away. This location is on the edge of the town, but within reasonable driving distance and has a university bus stop.
I do not know why there were $15000 in maintenance last year, but i will find out.
I have some major reservations since there are a few uncertainties about this one, but I was hoping to get the opinions of more experienced investors.
What concerns should i be aware of?
Is a 6% cap in the midwest too low in your opinion?
Are there questions i need to be asking that i don't have covered?
thanks for any help
Steve
