Am I running these numbers correctly?

[Jason Clark]

I’m looking at an 8unit apartment building, 2bd/2ba each. Asking price is 359,000. Conservatively I’m assuming $550 per month rent. 1 unit is vacant. I expect about $80,000 in renovation costs.

$439,000

Rent $4,400

Mortgage ($1619)

Taxes ($260)

Ins ($154)

Lawn ($100)

Vacancy ($220)

Repairs ($150)

Capex ($150)

Mgt ($440)

Income $1307

COC 18%

All these are assumptions and I believe I’m being conservative on the rent after renovations. Just want to get some insight if I’m looking at everything or what I’m missing to make sure I’m analyzing the deal correctly.

Thanks for your help.

[Enrique Huerta]

Hi Jason, Two questions:

Are those monthly figures? If so, I have annualized them and underwritten the deal below for you.

What is your down payment? It's hard to help you calculate cash on cash without a down payment. I will assume 30% and I would run the numbers like below:

The deal looks promising but I will make a few notes:

• Vacancy at 3% is too aggressive (in my opinion)
• There is no bad debt or concessions in your proforma
• You're missing Administrative, Marketing, and Payroll costs in  your proforma
• You're missing turnover costs but you have good capX so that may be OK
• There no utility expenses in your proforma