Posted by karp on November 05, 1998 at 20:25:49:
Dude,
Just chill till you get the write up on the complex.
After that we can help show you how to verify the numbers and make sure there is no 2nd set of books or that kind of weirdness.
Post again once you get the info.
Thanks,
karp
aka Karl Hartley
Advice on 32 unit complex - Posted by DavidV
Posted by DavidV on November 05, 1998 at 14:34:45:
I started investing at the beginning of this year and have some SFR renting experience but nothing in multi-units. I would appreciate any advice on things to look for while checking this out. Owner is sending me a package on the place so i know very little at this time. Asking 785,000 - 14 1br @395 and 18 2br @495 for a gross of 14,440. Property is owned free and clear and seller wants all cash (imagine that). Property is full and owner is wanting to move but can’t until the sell.
Thanx!
Re: Advice on 32 unit complex - Posted by Laura Newman
Posted by Laura Newman on November 05, 1998 at 21:20:13:
When you look at a commercial deal like this, you can use the same formula the banks are going to use as a rule of thumb.
Take Gross Annual Income $173,280
x 90% (use 10% vacancy)
$155,952
less actual expenses ?
=NOI (Net Op. Income)?
x .8333 (ROI of 1.2%)
= Annual mortgage P&I
and since multi units are going at fixed rates of about 8.75% right now, you can use that amount to tell you what they will loan you on the property.
If the Asking price is more than 15% above that, it may not be a deal. Other factors apply. But this is all I can say about figuring direct numbers.
Hope that helped.