12units And 8 Storage Units Is It A Good Deal?
I have an offer in on a 12 unit apartment building with 8 separate storage units.
Here are some facts about the building I am hoping to hear of some factors I may be missing. In my mind it is a pretty good deal.
Selling price: Around 260K
Units: 12 2-1 units
Storage Garages: 8
Rent for the 2-1 is 325 a piece, Possible upside to 380
Storage units rent 50 a piece
Monthly income if fully occupied is currently $4,300
Expenses:
20% down than payment is about 1780
Monthly Insurance is about 300
Prop Manager (Close Relative) 275
Estimated repairs monthly 400
Electric 55
Trash 90
Total monthly expenses 2900
Property is in a so-so neighborhood and the police have had to come out fairly regularly. Nothing too serious, noice complaints, domestic issues, and 1 drug situation.
My feeling is I would like to buy and spend another 10K on renovations. I would like to unload the tenents that are ruining the peaceful enjoyment of others and begin re-renting only to people who are not marginal. I believe my property manager is capable of doing this.
So what am I missing?
Thank you
Turns out I had to let it go. Owner would not budge much on price and I see the renovations were going to be more like 25-30K. I may take a second look at it in a couple months after it has sat on the market. Perhaps he will be more willing to comprimise at that point.