I have a complex i'm going after in Oklahoma City. The complex is a c plus to b minus complex.
 
The complex is 104 units with 48 units rented and renovated and 56 units needing to be renovated and leased out.
 
I'm working with a local property management company.
 
They have verified with me along with there sources in multi family that the apartment units that are rented are 150-200 dollars a month under rent. There is a complex directly across the street. That unit is the exactly the same and there 1 beds rent for 700, 2 beds for 800-850 and 3 beds 995. The complex we're buying has 1 beds for 400 and 2 beds for 450. Our complex also has studios that are renting for 350 but should be renting for 450.
 
So here's the numbers i'm using.
 
1.2 million dollar purchase plus rehab of 56 units at 4k a unit = $224,000 renovation
 
Across the street has a 98 percent occupancy year round and our current building has a 100 percent occupancy for units (48) that are rentable. Let's say 100 of the 104 units are rented
 
30- studios at 450 a month = 13,500
35 1 beds at 550 a month = 19,250
35 2 beds at 600 a month = 21,000
 
That gives us 53,750 gross income a month.
 
So at 53,750 gross income a month our expenses will be as follows (monthly)
 
1- property management 8% of gross income = 4,300
2- payroll, maintenance salaries= 5,500
3- taxes = 1,000
4- insurance, utilities, water= 9,000
5- material for repairs = 8,000
 
These are estimates from the owners expense sheets along with property managements estimates. So the expenses = 28,800 per month
 
53,750 gross income minus 28,800 per month = 24,950
 
I'm speaking with a lender who is considering lending 85% of the 1.2 million dollar purchase plus 224,000 renovation = 1,424,000
 
My payments would be 7,000 a month.
 
So 24,950 (income after all expenses) minus 7k loan payment = 17,950 a month Net operating income
 
I think there's plenty of room to make this deal work.
 
Please let me know if there's anyone out there who can do better than 85% at 50% occupancy and 7k per month on a 1,210,400 loan.
 
Thanks
 
Dustin Rose

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Hello,

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Dustin,

If you have someone who is going to lend at 85% @ ~7% I/O rate, they are being more than aggressive.  If they close this for you or you decide to go that route, I might be willing to pay to know who that source is, if it's possible and it's an entity, and not a private individual.

Jared

Dustin,

I know of no lender that provides 85% LTC at 50% occupancy. I work with many lenders and have never seen this scenario. 

Run and sign those papers!!

Diane

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