I’m interested in any advice on a block of 25 x 1-bedroom units that I’m looking into. I’ve never purchased a block of units before and aren’t sure of any unique issues they may have.
The asking price is $595K with “potential rental” of $125 per room. If this is true, this would still give a good return even with 60-70% occupancy.
Some things I’m sure about are: “most of bedrooms have adjoining bathrooms” (so I guess that means some bedrooms don’t have adjoining bathrooms) and there is a large communal dining room and living area and commercial kitchen and rooms “suitable for communal lounge, library, internet cafe, etc”. This sounds like a youth hostel sort of thing!!
I know I need to find out: size of the rooms, how much time and money they need to get them up to functional use (if any), rental demand for these sort of rooms and rental vacancy, what the rental projection is based upon, equivalent rental prices, how many of them are currently rented (I think they’re all vacant), rates & insurance costs, CG for that type of building in that area.
Are there any other things I should be wary of, checking out or looking for? How are these things normally managed — with an on-site caretaker?
Is this something that could work, or are these things just a nightmare? And, if it could work, what would be needed to make this work?
Thanks.
Thinking more about it, I’m not sure really about all the due diligence I need. I’m still new to this and haven’t got a handle on DD as yet. Can anyone give me any pointers so I don’t miss expensive things? I’m interested in looking at this deal, but I don’t want to bite off more than I can chew.
Thanks
Originally posted by Nigel Kibel – now moved to the desired location – Derek.
Firstly you need to look at the history of the property? What is trhe average income per year?
The other important thing is that on these type of deals in many cases the banks will deem this a commercial venture and they may only lend you around 60-65%. I would suggest that you phone Alistar Perry on 0407787313. He is a mortgage broker but is part of a large town planning company so he knows his stuff. I am also in the process of purchasing apartment complexes in the United States. However a number of us are doing this so the risk is reduced.
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand The United States Property Researcher and education
One Day property investment research workshop The United States. Please register your interest
http://www.changingplaces.com.au Buyers advocate.Thank you Derek
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand The United States Property Researcher and education
One Day property investment research workshop The United States. Please register your interest
http://www.changingplaces.com.au Buyers advocate.Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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