Chicago Investment Property – 12 Unit Apartment Building

Chicago Apartment Building For Sale

Chicago Apartment Building For Sale

Hello to all my blog readers out there. Today I want to take a look at a
Chicago Multi-Family property that is currently on the market. This
property is near 48th and Archer. It is listed by Eliseo Guzman , RE/MAX United.

I think that this property would make a nice addition to your portfolio.
But, we won’t know for sure until we run the numbers.
This 12 unit property is listed at $800,000. 10 units have 2 bedrooms and
1 bathroom.
The other two units are one bed/one bath. This property has been on the
market for almost 2 months. The gross scheduled income is $118,200.
This is a good location. It is close to Midway airport, public transportation,
and the I-55 expressway.
Let’s take a look at our key metrics:

Asking Price: $800,000
Gross Rent Income (GRI): $118,200
Gross Rent Multiplier (GRM): 6.77
Net Operating Income (NOI): $73,415
Cap Rate: 9.2%
Cap Rate at 92% of Asking Price: 10%
Number of Units: 12
Price per unit: About $66,000
Year Built: 1971

Expenses

Taxes________________________$$8,450
Repairs (7.5%)__________________$8,865
Vacancy and Collections (5%)________$5,910
Insurance_____________________$4,300
Electricity_____________________$1,150
Scavenger_____________________$3,000
Water________________________$3,000
Landscaping & Snow Removal_______$1,800
Property Management (5%)________$5,910
Pest Control___________________$1,200
Advertising______________________$600
Miscellaneous_____________________$600
=======================================
Total Expenses: $44,755

Based on my estimates, the expenses are running
at about 38% of gross rental income or $44,755.
This will give us a net operating income of $73,415.
When we divide the Net Operating Income by the asking price of $800,000,
we find that we have a cap rate of 9.2%.
If we adjust the purchase price down to 92% of asking price, we have an
attractive cap rate of 10%. Also, keep in the mind that the property
is in an ideal location, close to the airport, expressways, and public
transportation.

As you can see, the purchase price and the cap rate are inversely related.
If you want a higher cap rate, then you need to offer less for the property.
After you purchase the property, if you want to increase the cap rate, then
you need to increase the Net Operating Income. This can be done by
raising the rents, increasing non-rental income (i.e. vending machines, coin laundry, etc.),
or by reducing the expenses (improve collections, fix leaky faucets, etc.).

So at a 9% to 10% cap rate, I definitely think this property warrants further investigation.
As a buyer’s broker, I can assist you with purchasing this property or any
other multi-family property that is listed on the Chicago MLS. I am licensed to sell
real estate in the state of Illinois. Just send me your search parameters and I can
send you properties that meet your acquisition criteria. For more information, please
send an e-mail to mark@markkillion.com.

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd.
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

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About Mark Killion

My name is Mark Killion. I am a licensed Real Estate broker in Chicago. I work with Kale Realty. I specialize in rentals and investment properties. I am here to serve you! Send me a note! Visit me online: www.773property.com
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