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Enron Mail |
Jeff,
Before you write off the stage, a few things to think about. 1. Operating expenses include $22,000 of materials for maintenance and repairs. Plus having a full time onsite maintenance man means no extra labor cost for repairs. There are only 44 units a lot of his time is spent on repairs. 2. What is an outside management firm going to do? A full time onsite manager is all that is required. As I mentioned the prior manager has interest in returning. Another alternative would be to hire a male manager that could do more make readies and lawn care. If you turn it over to a management company you could surely reduce the cost of a full time manager onsite. 3. Considering #1 & #2 $115,000 NOI is not necessarily overstated. If you want to be ultra conservative use $100,000 at the lowest. 4. Getting cash out is not a priority to me. So I am willing to structure this deal with minimum cash. A 10% note actually attractive. See below. My job just doesn't give me the time to manage this property. This property definitely requires some time but it has the return to justify the effort. Sales Price 705,000 1st Lien 473,500 2nd Lien 225,000 Transfer fee 7,500 Cash required 14,500 NOI 100,000 1st Lien 47,292 2nd Lien 23,694 Cash flow 29,014 Cash on cash 200% These numbers are using the conservative NOI, if it comes in at $115K then cash on cash return would be more like 300%. This doesn't reflect the additional profit opportunity of selling the property in the next few years for a higher price. Do you want to reconsider? Let me know. Phillip
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