The Math the Broker Pitched
The broker listing on Redfin shows it was initially listed at 2.4 then it was marketed at $2.22M and closed at $2.0M, a $220K haircut. At close, the stated cap rate is 6.7% and GRM is 8.77. Working backwards from those figures gives an implied gross annual income of roughly $228,050, or about $1,728/unit/month. The building is a 2-story built in 1973. All 11 units are one-bedrooms averaging about 640 SF. Gross building area is 7,061 SF on a 9,493 SF lot. Parking is 13 stalls total: 4 surface and 9 covered. All units are 1+1
| Metric | At-Close (Stated) | |
|---|---|---|
| Monthly Rent / Unit | $1,728 | |
| Gross Annual Income | $228,050 | |
| CAP (at $2.0M) | 6.7% | |
| GRM (at $2.0M) | 8.77 |
With average rents coming in at $1,728 this leaves about $250-500 of upside per unit based on how well it can be renovated when the units turn. Its allowing the new buyer to get this to an 8 cap. This looks like a really good deal.