Evaluate this Multifamily Deal

[Evan Peissig]

I just got an accepted offer on a first deal.  It is a 10 unit apartment complex (8x1BR/1BA 2x 2BR/1BA) and a Duplex (3BR/1BA and 1BR/1BA).  Below is the spreadsheet analysis.  Would appreciate any comments on the deal!  I am financing with equity in another property so it is essentially 100% financing.  I am not yet sure the terms of financing at this point, but likely fixed for 5 years around 5% then variable.

Prepared By			Key Investment Criteria
Client Name			Max Offer	$       425,000
Property Address			Down Payment	$                 -
Number of Units	12			Cash Flow (Per 100K)	$88.30
List Price	$     425,000	% of List Price		Cash Flow (Monthly)	$         375.29
Offer Price	$     425,000	100%		Total Cash In	$    10,000.00
ARV/Appraised Value	$     450,000			Debt Service CR	1.16	Pref >1.2
Discount (%,$)	0%	$                 -		Debt Yield Ratio	7.65%	Pref >10%
Purchase Price (Max Offer Price)	$     425,000			Cap Rate	7.47%	Pref >8%
Percent Down	0%			LTV	1.00	Pref <.75
Down Payment Amount	$               -			Rent/Price Ratio	1.35%	Pref 1.25%
Amount Financed	$     425,000			COC ROI Year 1	218.0%
Interest Rate	5.20%			(Exp+Int)/Income	84%
Costs of Repairs	$         5,000			Gross Rent Multiplier	6.3	Pref <9
Closing Costs	$         5,000			COC Return	45.0%	Pref >10%
Total Cost	$     435,000			Break Even Ratio	93%	Pref <85%
Length of Mortgage (Years)	30			Expense Ratio	53%	~50%
Payment	Monthly	Annual		ARV-Total Cost	$         15,000
Monthly Mortgage Payment	$2,333.72	$      28,004.65		% Investment of ARV	96%	Pref <75%
		10 year Return	65%	$284,164
Rental Income	Monthly	Annual		15 Year Return	113%	$490,037
Unit A (10 unit Apt)	$    4,550.00	$      54,600.00		20 Year Return	172%	$748,269
Unit B (Duplex)	$    1,250.00	$      15,000.00
Unit C	$               -	$                  -		DSCR greater than 1.45		1.16
Unit D	$               -	$                  -		Standardized Cashflow >180		$88.30
Gross Rental Income	$    5,800.00	$      69,600.00		LTV less than .76		1.00
Vacancy Rate	8%			ROI year 1 greater than 20%		218.0%
Net Rental Income	$    5,336.00	$      64,032.00		Expense ratio between 45 and 55%		53%
		Positive initial equity		$     15,000
Expenses	Monthly	Annual		15 year return greater than 115%		113%
Property Management Fees	$           320.16	$       3,841.92	6.0%	Total Cash In Less than 50K	$     10,000
Leasing Costs	$                  -	$                  -	0%	DYR greater than 9%		7.65%
Maintenance Reserve	$           750.00	$       9,000.00
Utilities	$           375.00	$            4,500
PropertyTaxes	$           640.17	$       7,682.00
Insurance	$           325.00	$       3,900.00
Other (Snow, Lawn Care, Trash, etc)	$           216.67	$       2,600.00
Total Expenses	$    2,626.99	$      31,523.92
Net Operating Income	$    2,709.01	$      32,508.08
Mortgage Payment	$    2,333.72	$      28,004.65
Total Cash In (Downpayment + Repairs)	$   10,000.00
Net Cash Flow	$       375.29	$       4,503.43
Investment Analysis
Appreciation Rate (20 YR AVG = 4.4%)	2.5%
Rent Appreciation (20 YR AVG = 3.1%)	2.5%
Cost to Sell Property	0.0%