First Deal Analysis (practice)

[Matthew Vedder]

Hi BP Community,

I just created my first practice deal analysis and thought I would share with you all in hopes of getting some feedback. My goal is to find fourplexes in B (ideally) or C neighborhoods that cash flow at least $200 per door with financing. This property fell just short at $191.40 per door. 

This is an actual fourplex that is currently pending sale (not to me). Each unit is a 730 square foot one bedroom. I found it on realtor.com here. It is in the College hill neighborhood in Cincinnati, which appears to be an up and coming B/C neighborhood according to this post. I am assuming that it went for asking price and that I would be able to get a similar deal in this market if I had the down payment and other upfront cash ready to go. I made a ton of assumptions here, the biggest of which is probably the rent. Cincinnati investors please let me know how far off I am on any of these figures or if I am missing anything! 

Thank you!

Matthew 

Asking price	$235,000.00
Purchase price	$235,000.00
Value	$252,546.00	Based on Quantarium value
Down payment	$47,000.00
Rehab/repair costs	$5,000.00	No known issues
Closing costs	$11,750.00	5 % of purchase
After rehab value	$252,546.00
Equity	$59,546.00
Investment	$63,750.00
Rent	$3,000.00
Unit 1	$750.00
Unit 2	$750.00
Unit 3	$750.00
Unit 4	$750.00
Monthly Expenses	$2,234.40
Mortgage	$844.00		Terms	30 yr fixed @ 3.5%
Management %	10.00%		Management $	300
Maintenance & repairs %	10.00%		Maintenance & repairs $	300
Capital Expenditures %	10.00%		Capital Expenditures $	300
Vacancy %	3.58%		Vacancy $	107.4
Insurance	$110.00
Water and Sewer	$100.00
Taxes	$173.00
Cash Flow	$765.60
Cash Flow Per Door	$191.40
Yearly Profit	$9,187.20
Cash On Cash Return	14.41%

[Joseph Cornwell]

@Matthew Vedder Water cost definitely seems low, I would estimate closer to $200-250/mo for Cincinnati water works on a 4plex. The biggest thing on any deal like this is to verify rents, most agent list with market rents not the actuals. Always get leases when possible. Otherwise this could have potential but keep in mind this is a C-, D+ area.