Underwriting Assistance · Multifamily Strategy Community

Underwriting Assistance

I’m looking at a 12 unit that is listed for 549k. It’s all 1/1s. Tenants pay electric, owner pays water, trash, and lawn. The gross rents are all over the place, stating the year in the 2k-3k range and ending the year in the 5k-6k range. The repairs were almost 20% of gross rents last year! Utilities were almost 15%. Obviously, the NOI is bad based on the low initial rents and high repairs. The repairs could be rehab to the existing units, which would be easy enough to verify. My question: What signs do you look for that a property is mismanaged, rather than having continuous problems? If the next owner was able to cut down on the repairs, the returns start looking really good…. But that’s IF you can cut down on that huge expense. Thanks in advance, I’m learning a lot from y’all!

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