13 units for $150,000.00

**BOSS** · 03-21-2009, 07:16 PM

Hey everyone I found another buy.

I talked to a real estate investor that is ready to get out of the market. He is ready to start unloading all his investments. He is 67 years old and ready to start getting out of the game. I am 26 years old and ready to get into the game.

I talked with the real estate investor today. My uncle who is paralyzed setup the deal. My uncle has 15,000.00 I have 15,000.00. I will do all the work to keep up the unit because I already have 4 units and know how to keep up rental property.

In all the excitement I told me uncle that we would do the deal 50/50. Now that all the "love clouds" are settling I began to think about this. I am putting up the same amount of money. I will do all the work. And we both get 50/50?

Here are the numbers for the units:
70,000.00 for the unit:
450
300
300
400
300
400
500
2650
Insurance 200 a month
Repairs 200 a month
Tax 300 a year

80,000 for the second complex:
450
600
450
400
400
450
2750
He pays the untilities for the people: 900 a month
1850
note: 65,000 = 700 a month for 20 years

200 insurance
200 repairs
300 a year taxes

150,000 for 13 units and 2750+2650=5400.00
expenses about 3800.00 = cash flow = 1600.00 per month
What do you think about this deal?

Would you agree with my numbers?

**Treble888** · 03-21-2009, 10:38 PM

Hi there
Could you clarify a bit more about the numbers?

BTW, as you will do all the work, charge 10% of the rentals to come to you and then go for 50/50 of the remainder to make it a fair deal.

**slavipz** · 03-24-2009, 06:24 AM

Yep, can you please clarify the units as i'm really hardly trying but can understand for sure what you mean by them...

**ryanallen** · 03-24-2009, 11:35 AM

Are these units in your county? What is the rental market like there? Is your rental market going up or down?

**BOSS** · 04-27-2009, 03:14 PM

Here are the numbers for the units:

$70,000.00 for the 1st apartment complex:

Income:
unit 1: 450
unit 2: 300
unit 3: 300
unit 4: 400
unit 5: 300
unit 6: 400
unit 7: 500
$2650

80,000 for the second complex:
unit 1: 450
unit 1: 600
unit 1: 450
unit 1: 400
unit 1: 400
unit 1: 450
$2750.00

Total Income: $5400.00

Expenses:
Insurance 200 a month
Repairs 200 a month
Tax 300 a year
Electricity included on units $1950.00
Note @ 20 years: 700.00
Total Expenses: $3080.00

5400.00
-3080.00
2320.00 Cashflow!

This will be a nice deal.

I am currently doing the appraisal. This is a total of 15 units. The old fashioned owner wants $150000.00 for both units. I believe they will appraise for anywhere from 200,000 to 225,000.00.

**Treble888** · 04-30-2009, 07:28 AM

Hi Boss
With this amount of cashflow, its simply an exciting one! Even if you consider 90% occupancy rate, you are still making a lot of money. And when the market turns up, the capital gain will be outstanding!

What are your ultimate golas with them? Buy and hold sounds perfect for them!!

**BOSS** · 05-01-2009, 10:06 PM

Yea I plan on holding them for a few years. I believe I close on them in about a week or a week and a half.

**Vegasloanlady** · 05-08-2009, 11:50 PM

Others factors that are need are.

What kind of neighborhood is it in?
What kind of condition is it in?
Are there any deferred maintenance issues?
Are there any code violations?
Are there any tenant, drug, prostitution problems in the buildings?

All of these can have an effect on resale/pricing.

I have dealt with too many rentals with the above-mentioned problems to realized it's not about the numbers, but more about the potential headaches.

**REITrainingWhse** · 05-09-2009, 10:36 PM

Originally Posted by BOSS

Note @ 20 years: 700.00

The guy is going to finance it for you? Or is that the existing note? Seems very low for $150K.

I am sure that the money is there, though I am wondering why the seller is selling at such a low price... Either the guy is not sophisticated, or trying to hide something... Like "missing expenses."

Seeing that it is a "commercial" type structure (>4 units each) I would think normal NOI formulas would be used to figure value. Interesting deal, though since I have not seen complete due diligence, I can't comment on if it is good or bad.

Let us know!