750,000 ? - Posted by louis

Posted by Ed Garcia on July 06, 2001 at 03:24:10:


Since you haven’t given us much information abut this acquisition, and based on your Gross Rents, I don’t agree with the value that your suggesting. At an 11 Cap I figure the property is worth $654,545. Even in New York, a 9 Cap would make it worth $800,000.

Louis, I see no reason to lose any sleep over this deal. You say that there is a lot of room to raise rents, but then again don’t give us any numbers.

When I work a deal like this, here are some ballpark questions I ask just to get a feel if I have a deal, and how to start to work it.

Questions to ask for commercial

(1) Describe The Units and the surrounding area?
(2) How old are the units?
(3) What’s the unit mix ( how many 1 br. 2 br etc)
(4) What’s the vacancy factor in the area?
(5) What is the gross income of the units?
(6) What is the vacancy of the units?
(7) What is the NOI?
(8) What are market rents in the area?
(9) Are there any other Units in the area for sale?
(10) If so at what Price?
(11) What are the going Cap rates in the area on multiple units?
(12) Have any other Units in the area recently sold?
(13) If so at what price?
(14) How much does the seller owe on the units?
(15) If there is a loan, is it assumable?
(16) Will the seller carry a second?
(17) Is there any differed maintenance?
(18) If so, estimated cost of maintenance?
(19) How’s your credit?

Ed Garcia

750,000 ? - Posted by louis

Posted by louis on July 05, 2001 at 23:19:54:

i am interested in purchasing a 24 unit apt. building in ny
it was apraised at 900,000 but has not sold in 3 years
it is making 10,000 monthly gross income and nets 4000.00
after the bills there is no mortgage on the property and it’s owned by the original builder.
all the maintenance and upkeep work orders ect. are contracted out and i’m sure i can bring the monthly expense down substantialy by bringing most of the maintenance in house (my expertise is in prop mngmt)there is also alot of room to raise rents.
i would like to finance the building with hard money 80%
and 20% carried back by the seller for the purchase price of 750,000
since the property is worth more (900,000) does that equity factor in to my purchase as if it were a down payment ?
please feel free to pick this deal apart and offer any sugestions as i am pretty new to this investing thing…