I have a bunch of material (really, I do) but don't have the time to put it up lately. I want to update you about where our business is going, but that will have to wait for another time. Until then, I want to share marketing material that came in the mail last week. I would just go ahead and provide a link to this ad, but you have to join to see the details of the listings. I'm going to punch it out real quick, so if you see any glaring typos, do tell.
Maryland Manor Townhomes
4600 West Maryland Avenue
Glendale, AZ 85301
(Lender Owned)
$3,200,00032 Units
Proforma NOI $270,389
Cushman & Wakefield has been exclusively retained to market the above referenced property on behalf of an out of state lending institution. The property was recently foreclosed on and is in various stages of construction completion. The current owner has expressed a willingness to consider providing seller financing to a qualified buyer.
Maryland Manor Townhomes was built to home builder specifications and possesses spacious units averaging 1,344 square feet. All units have attached two-car garages as well as full size washer and dryer hookups. The property is in a quality infill location and is within close proximity to numerous employment opportunities, entertainment, shopping, and schools.
This is an excellent value add (sic) opportunity for an investor to finish construction on this property and either rent or sell the finished units.
My Commentary
Puhleeeeze!! At that price, the CAP rate is only 8.4%. However, from the pictures it shows, it will need a large investment from the buyer before the units can be sold or leased. In this market, especially in Arizona, it makes no sense to try to get full price for a foreclosed incompleted multi-family dwelling.
Thirty of the units are 1300-1400 sf. We had apartments that were over 1200 sf. I can tell you that the make readies will kill your bottom line. Between the carpet and paint alone, even on a year lease, much less with the skips, we felt as though we couldn't keep up. If you try to clean the disgusting messes out of the carpets, this chases away the better qualified renters.
Sell the finished units? Ha. To whom? They show comps of $164,000 (1317 sf) to $395,000 (1851 sf), while the sales price is $100,000/unit. But we have no idea what date the sales were and how much others are going for in the area. Plus, by the time the project is completed, who knows how much they'll be worth. AZ was hit hard.
Bottom line: When I see "value added" in a marketing flier (no matter how thick and shiny), I run for the hills. That's a death knoll, if ever I heard one.
