60 Unit Apartment for Sale - Posted by Lion NC
Posted by Lion NC on November 08, 2004 at 10:25:24:
This seller no longer wishes to manage the 60 units and wants to sell them to me. They are located in SW Atlanta, GA.
Units are all identical with a 1 bdr townhouse style. Kitchen and living room are down stairs and the bedroom and bathroom are up stairs.
Owner is asking for $1.6mm. The owner needs $500,000 cash and will carry the remaining $1.1mm on a 30 year at market interest rates.
Employee $14,400 (part time maintenence man. I would manage the property myself)
Rent $425 per @ 91% occupancy
Rental income: $280,500
Cap Rate: 9.2%
I don’t yet know what to expect from lenders, so I didn’t include dept service. Any guidance here is appreciated.
I’m not sure that this is a deal as it stands but I believe there is upside. Rents seem a bit low for the area, and I’m told that they can be increased as a surcharge to water billing increases that are being implemented throughout Atlanta. Owner told me that other investors were making offers and that one had a plan to make the units two bdr there by cutting the total number of units down to 30. And another investor had a plan to build 60 more units on the property. All of this gives me the impression that there is plenty that can be done with these apartments even if not according to those plans above.
I would like to build up the value of these units over a year or two and then sell for a handsome profit, then move on to the next project.
I have excellent credit and about $30k in a 401k. I don’t want to feed the desire to acquire, but I am hoping this is something worth pursuing.
I realize there are plenty of other factors to consider, but I’m hoping I provided enough info to garner some guidance as I’ve never done anything like this before.