Posted by John Corey on May 19, 2006 at 06:03:54:
Eric,
Send me an email as I can make you a specific offer once I have more info.
So you get other ideas and to help the others reading…
You imply that you can rehab 19 units for a total of $38K at the minimum. You then say that $95K would make them extremely nice. You conclude by saying it will take $150K for rehab. The message you are sending is you do not know your numbers or have something to hid.
I suspect that you are just being sloppy and rolling in some holding costs or closing costs.
If you want real help try to be consistent and use what would be reasonable numbers for this project. If it is $2K, or $5K or more then that is what it is. Sharpen the pencil and come up with some figures that will stand up when questioned.
Are you really expecting to sell the property after the repairs and the stabilization of the rent roles? Is there any possibility that you will decide to hold later?
When will the two rehab projects be done? Are you intending to sell them? What would you expect to do with the profits from the 2?
Back to the building. You indicated that it is completely vacant in a good middle class neighborhood. How did it get so bad if the area is good? What will stop you from running into the same problems. That future value you are expecting only happens after there are paying tenants in the property for a period to prove the income will be there (plus the NOI is as expected).
John Corey