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Ramco,  in Dallas, TX

purchasing a 20 unit multifamily in Dallas TX area

Asked by Ramco, Dallas, TX Tue Sep 23, 2008

I am considering purchasing a 20 unit multi family building in the Dallas TX area. What is the first thing I need to do to evaluate if I should purchase it or not. It is selling at a good purchase price. But I need to know how to break the numbers down to see if I will make money.
Please help.

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Hi Ramco

You want to run the numbers for cash flow, rate of return, and profitability. Please look at my real estate investment software at http://www.proapod.com. I also offer free real estate investing articles on my blog. Go to => http://www.proapod.com
Web Reference: http://www.proapod.com
0 votes Thank Flag Link Wed Oct 15, 2008
I am assuming it has residence living in the property? You need to obtain copy of the books show p & l statements, and much more. Contact my office if we can assist, there has also been apartment complexes foreclosed. You need to be approved for loan when submitting LOI.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Wed Oct 1, 2008
Richard,

ROI and Cap Rate.......On a 20 unit I'd expect to get rent roll and financials. I always take these with a grain of salt though. Then do your evaluation.....is it in an area where rents will increase or decrease? Is there high turnover or steady tennants? What's the vacancy rate? Is it in an area that is appreciating or depreciating? Who's responsible for the utilities? Is there a chance to make any improvements and increase the rent. Typically buildings like these sell for purely a function of the rent, so if you plan to sell it for a profit in the future you will need to evaluate how you can increase the revenue. Is there a chance for laundry, vending, condo conversion, build additional units, etc.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue Sep 23, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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Has the seller given you a P&L, financial data, rent rolls, etc.?
0 votes Thank Flag Link Tue Sep 23, 2008
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