Apartment purchase - Posted by Ryan

Posted by ray@lcorn on August 07, 2003 at 10:05:34:


Get the actual numbers. Look at the rent roll and collection history for the last twelve months to establish the vacancy/collection rate. (There is a difference.)

Examine and verify the expenses line by line. If the seller doesn’t have detailed operating statements, get the tax return.

Percentage estimates on revenue loss from vacancy and expenses make the NOI and cap rate calculation pure speculation. Garbage in, garbage out.


Apartment purchase - Posted by Ryan

Posted by Ryan on August 06, 2003 at 13:07:56:

I want to put a contract on this property based on the figures but I would like to see what other investors think about this deal. If you had the opportunity would you go forward with the purchase and does it look like I’m missing something.

Purchase Price: $170K
Owner willing to carry up to 40%.

Gross Income: $36,000
Vacancy: 7% $2520
Taxes: $1256
Insurance: $1700 Flood and standard insurance
Expenses 20% $7200
Gas $2988 Owner pays gas $249 average
Utilities $3000

NOI $17,336
Cap rate 10.2%
GRM 4.7

The expenses and the vacancy rate are a little on the high side. Does this look like a good deal?