6 Unit (2-2br and 4-1br) $399,900.00 - NEED INVESTMENT PARTNERS

Do you have any more info on expenses? At 40%, you would be looking at a cap rate of 10% which is good for SoCal.

How is the neighborhood?

Taxes are approximately 4000yr

Insurance approx 800-1000 for year

Comps - none in recent months 8 months ago it was 625,900.00

Neighborhood is average. There are other units on same street. Very busy part of town and rents would be 1050 for 1br and 1200 for 2br approx.

How much would you offer? (just sneaking a little learning in here)
Rina

did I miss the question?

lol

I am looking for someone to snatch this deal up quick and if you want to see more pics let me know. By the way I just looked at ben's deal on the Arkansas property and it may be a good investment.

Forgive my naivety. I guess my question, in general, was, if we're told to offer 50%-70% on a property, does one go by the Fair Market Value/Appraised Value or by what the seller is asking. I know what I've been doing really works for me, but I just go by my gut. I'd like to know the standard investors' formula.

Rina

Rina I think standard might be 10% off list but I too use gut and it seems to be working for me too.

In the course, we're told to lowball, lowball, lowball. I did that on the last 2, and of course my offers weren't even considered. I felt guilty after that, because I knew better. Properties here are already at a 30-50% discount in the asking price. Nothing's selling. I think I'll just keep doing what I do. Next year, when I've got 1/2 mil to work with I'll call you about California!

Rina

Rina wrote:

Forgive my naivety. I guess my question, in general, was, if we're told to offer 50%-70% on a property, does one go by the Fair Market Value/Appraised Value or by what the seller is asking. I know what I've been doing really works for me, but I just go by my gut. I'd like to know the standard investors' formula.

Rina

Single families go by comparable sales ie what other similar, close by houses sold recently.

Duplexes and even triplexes go by the same method eventhough they are "multi- units".

Larger multi-families go by the gross rent multiplier (which I do not use) or the cap rate method (which I do use as a starting point). For the cap rate, take all the expenses (maintenance, vacancy reserve, repairs, utilities, taxes, insurance, property management etc.) but NOT debt service and subtract them from gross income to get net operating income (NOI). (Better if you have actual numbers rather than pro forma.) Then divide NOI by the price to get the cap rate.

Higher is better. (To a point.. if you get up in the high teens, it may mean something is wrong with the property so it is also hish risk.) SoCal typically has cap rates in the 3-5 range which is horrible.

The cap rate is basically a measure of your first year's cash return if you bought the property all cash.

You are so right on that one. On the 6-unit tha I am working on purchasing now I had same issue trying to figure NOI - but I like your method, thanks.

I posted this deal yesterday and I have heard back from one person but the is a GREAT offer and I just want to get it out there. So if interested please contact me asap.

I now have the inside on a second set of apartments exactly like these and I am still looking for serious investors. The numbers will work!

I now have the inside on a second set of apartments exactly like these and I am still looking for serious investors. The numbers will work!