Advice on Apartment Building

Hi:
There's a 7 unit building available near me. The gross rent is about
$6000/month or $72,000 a year, and operating expenses (except taxes) are
$12,000. My question for you experienced multi-unit investors is, what would
you pay for this building? Using the 1% rule of thumb, I'd ballpark it at
$600k - does that sound about right to you all? This would be my first
multi-family purchase, so any advice would be appreciated.
Thanks,
Freud

Re: Advice on Apartment Building

In article <jq6bf.37$>,
"Freud" <> wrote:

> There's a 7 unit building available near me. The gross rent is about
> $6000/month or $72,000 a year, and operating expenses (except taxes) are
> $12,000. My question for you experienced multi-unit investors is, what would
> you pay for this building? Using the 1% rule of thumb, I'd ballpark it at
> $600k - does that sound about right to you all? This would be my first
> multi-family purchase, so any advice would be appreciated.

That would be a pretty nice deal, assuming the physical plant is
OK. You wouldn't want to get into this, and get hit with a $50,000
roof and $75,000 boiler in the first year. Hire a professional to
go over the building with you so you at least know what you are getting
into.

BTW, is the building actively for sale? If so, what is the asking
price? In this crazy market, I'd expect the asking price to be
much higher.

You might want to get some kind of option put in writing. You
wouldn't want someone like me to find out where this is, and swoop
in with a few dollars more and steal it from you.

-john-

--
============================================================ ==========
John A. Weeks III 952-432-2708
Newave Communications
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Re: Advice on Apartment Building

In article <>,
says...
<snip>
> BTW, is the building actively for sale? If so, what is the asking
> price? In this crazy market, I'd expect the asking price to be
> much higher.
>
Yes, it's for sale, and yes, the asking price is crazy high - $900k. Of
course, that's down from $1M a couple of months ago, so I'm going to
keep my eye on it. In this area, I expect rents to increase at a decent
pace, but not enough to support a price like that. Thanks for the input.
Freud