Need Help On 8-unit Deal
Looked at this building today and it seems that the numbers may work... I wanted to see what you all think.
GAI - 44,820
Total Expenses - 20,944
NOI - 23,876
Asking Price - 175,000
The reason the expenses are so high is because the landlord pays ALL utilites (water, sewer, gas, electric) + waste management.
If I am going to make an offer, it would be like this....
170,000 - Purchase Price
136,000 - Bank Financing (80% LTV)
17,000 - Seller Financing (10% LTV)
17,000 - Down Payment (From My HELOC)
Annnual Debt Service would be 17,322. Total annual cash flow would be 6,554 or 546.00 per month.
Two questions I have are.......
1) Would you do a deal where the owner pays all utilites?
2) If yes, what do you think of this deal?
I would appreciate any help you can provide!!
What is the breakdown on your expenses?
In my location (deep south) I stay away from paying electric because tenants can keep themselves very cool when they are not paying.
Do you have any cost history on the utilities?
Eddie
Rain....
Gas and Electric is approx 8210
Water/Sewer is approx 2400
Trash is approx 1036
Taxes are 5244
Insurance is 1700
Maintenance is 2300
These are the annual totals.
You said your debt service (annual dollars required to satisfy your debt) would be 17,322. If this is correct and my ballpark estimate of 12,000 NOI is anywhere close then you are going to be in the red.