A 260-unit apartment complex priced at $8.5 million looks solid on paper with debt service coverage ratios between 1.2 and 1.56, but the speaker warns the rent assumptions are probably too high. Realistic rents would be $250k to $275k annually per unit, not the $325k to $375k modeled in the deal.
Are you in the deal room? Looking at yesterday, right? Correct. Correct. So it had a pretty decent, uh, pretty decent deal on that. So here it shows that underwritten at 85, 90, and 95%. So the purchase price is $8.5 million, closings and all that, everything else. So total basis is about $9.1 million, 260 spaces, operating expense is 25% of the load gross revenue, debt case is 65% loan to value, 8%, 8.5% IO. Uh, so our annual debt service is going to be about half a mil with equity at 3.2. Uh, I ran this at 3 rent levels: $325,000, $350,000, $375,000. That's really high for that area, just going to say that right now. 85% occupancy shows that we have a DSCR of 1.2. At $350,000, it shows that we're at 1.3. I'm only looking at the DSCR because it doesn't make sense to it's under 1.2. The other numbers don't mean anything. So at the 1.47, so at 90% occupancy, we still are at 1.35, 1.45, 1.55, 1.56. At 95 occupancy, we're at 1.4. So this thing pencils strongly on all levels at 80 to 95%. The issue is, is that the, I believe that the monthly per unit price is too high. I think it needs to be $250,000, $275,000, Right, so should we call it that?
