Is this a deal? - Posted by Lynn
Posted by Lynn on January 27, 2005 at 10:44:13:
Hi - I’m new to apartment community investing. I’ve only been involved in very small development and land purchase deals. Ready to buy an apartment community (I have 20 years in property management handling other people’s money) and not sure if I can make these numbers work. Price for the 40 units is $ 635 k. Can’t believe the price and yes, I’m comfortable with the location of the property. It seems as if it is so low because it is being mismanaged since I’m sure I can shave those maintenance and office and management costs. But, am I looking at the whole picture?
The expenses currently on the property are very excessive. Their summary is as follows:
Total income: 163,986
Total expenses: 116,107
Broken down and rounding by me:
Office supplies/admin and office salaries 26K
Maintenance and salaries and contract 47K (including turnover costs)
Management fee 8.5k
Property Taxes 15k
I see lots of room for improvement in the expenses, but any input by you guys would be GREATLY appreciated. I just want to make sure if I make an offer that I understand what I’m getting myself into since my “new investor” status may get me in trouble in unforseen ways.
Thank you all so much.