OfflineHere are the numbers on the 12 unit apartment. I attached a word document with all the cash flow numbers on it.
There's a couple of things you need to know. Since the units are vacant, the assessed value was dropped from $284,400.00 down to $108,200.00. That's a substantial drop. However, that's to the buyers advantage, because the taxes should go down substantially. I would estimate at least 50%, based on the new assessed value. I think you know that the assessed value is typically much lower than the actual value of property in Indiana.I don't think another assessment will be done for 2 years, so that's in the buyers favor! In the 2 examples of cash flow that are attached, I used the amount of taxes charged last year. So, the monthly costs should be lower than what I'm showing. I'm giving you 2 examples. One at $550 a month per unit and one at $700 a month per unit. Section 8 will pay up to $963 per unit, but I wanted the numbers to be very conservative and that they are! Please let me know if you have any questions. I'll get the pictures over to you this weekend.
12 unit Apartment Building located in Gary, Indiana
Lot = 45x125
Square footage = 12336
Units = 12- all are 2 bedrooms
Taxes = $4850.10
Exterior = Brick
Heating = Natural Gas
Utilities = Each unit is metered to pay their own utilities
Occupancy = Empty
Building = All units need a complete rehab
Roof = Less than a year old
Each unit will need complete work. We estimate the cost to be $8000 per unit, possibly less or possibly more. I think we all know that rehab costs vary.
Now the rehab cost estimate includes the crew to do the work, and the spreadsheet includes management cost
You would be getting a ready made deal handed to you, crew to do the work and management to take care of everything. There is a 10% cusion on the rehab cost for unexpected situations.
The rehab will be done to meet section 8 standards, which would gross cash flow $11,556 a month, and net cash flow of $8935 a month.
The asking price is $50,000 for the 12 unit building, located in Gary, IN and about 1 block from the major road that runs through the area with easy access to the major bus lines. It's not in the worst section of gary either, and is an excellent opportunity.
Serious inquiries only, not available as a financing deal. The rehabb will take 1 month 2 tops.
Cash Flow Numbers on 12 Unit Apartment
Example #1
Rent = $550 per unit – per month
Total Rent = $6,600.00
*Taxes = $265.00
Insurance = $300.00
Property Management(10% of rents) = $660.00
Maintenance& Misc. =$600.00
Water Bill = $300.00 – (Required by city law to be paid by landlord)
Total Expenses per Month = $2125.00
Net Cash Per Month = $4475.00
NET CASH PER YEAR = $53,700.00
*Taxes will most likely be reduced by 50% over last year, due to building being vacant and new assessed value. However, we used last year’s “higher” number.
Example #2
Rent = $700 per unit-per month
Total Rent = $8400.00
*Taxes = $265.00
Insurance = $300.00
Property Management(10% of rents) = $840.00
Maintenance & Misc. =$600.00
Water Bill = $300.00 – (Required by city law to be paid by landlord)
Total Expenses per Month = $2305.00
Net Cash Per Month = $6095.00
Net Cash Per Year = $73,140.00
*Taxes will most likely be reduced by 50% over last year, due to building being vacant and new assessed value. However, we used last year’s “higher” number.
NOTES
Cash on cash return will be calculated once we know your cost to purchase the building.
Section 8 will pay up to $963.00 per unit. We used more conservative numbers. We would rather show you lower numbers, and if you rent the units for more money than the examples show, it’s just “icing on the cake.”
We see no reason why the assessed value would not increase back to the original amount of $284,400 or higher, after the building is rehabbed. The new assessment should be completed sometime in 2013. You do have the right to ask for a new assessment before this date. If you were to sell the building, it would be to your advantage to have a new assessment completed, because the assessed value would increase substantially, thereby increasing the selling price. Indiana recently passed a new law, capping property taxes. The new law and the cap are to your advantage
If you are interested please reply.
This one is already gone. Have any of you come across this much cash on cash return on a deal before?