Please....Help me analyze this deal 50% rule negative cash flow

[Erica Hatfield]

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[Jason D.]

@Erica Hatfield its negative with the 50% rule and not in your analysis because your expenses are way too low. Nearly all of them.

Have you gotten a 4% interest loan quote with 0 points on a commercial property over 30 years? That seems low. I would have guessed 6% minimum.

$2500 closing costs on a $1,000,000 transaction? Probably closer to $10,000 or more.

Vacancy should be 5% - 8%, capex and maintenance should be $100/unit per mo. At a minimum, maybe as much as $200/unit.

I Would try to get the previous owners schedule e to see what their real expenses were.

[Erica Hatfield]

@Jason D. thank you for taken the time to respond. I am still in education stage learning how to analyze deals and trying to figure out what market to get into. I will edit the numbers and reach out to the current owner for better numbers. Thanks again for giving me some more realistic information to work with

[Joseph Pietrzak]

The other problem here is that you will not be able to put just 3.5% down. Your looking at 20% minimum most likely, maybe as high as 30%. That is a huge difference in cash needed ($35,000 vs $250,000 or $300,000) just for a down payment.

[Erica Hatfield]

@Joseph Pietrzak thank you I am trying to go with program established in 2017 Freddie Mac multifamily. Still researching the program and the requirements.  At this point I feel I need to review the program details with a realtor or someone with more knowledge