Do these numbers look ok?

[Mark K.]

Hello everyone,

I'm a new landlord as I got two SFH's in 2017, the first in January and the 2nd in December. I had to evict my first tenant and she drug it out to the last minute. Basically, it took 2 months, court, a visit from the deputy's and finally at the last possible minute, she got out.

I'm retiring from my current job soon with a pension. I also have access to my funds in my 457 plan, deferred compensation. For years, I was thinking I'd roll the entire amount into my Traditional IRA as I could defer taxes. I've invested in stocks for almost 30 years now. I learned what I was doing though in 2005 and since then, my XIRR is around 17%. I don't think I'll get that with real estate, but I like the idea of diversifying into real estate.

Let's say my 457 plans funds, after taxes, if I withdraw the funds will be around, plus or minus, $40K.

I'm analyzing a commercial/residential property. It has 9 commercial spaces and 5 residential. The monthly gross income averages $5570.  

Mortgage with P and I, water, sewer, insurance, taxes, electric and such comes to $3569. 

I used 7% for repairs ($389.90), Cap Ex ((389.90) and 5% for vacancies (278.50)

So, I came up with a cash flow of $5570 minus expenses of $4628 which comes out to $942 a month. 

If I pay a 20% down payment and closing costs, it will be about $116K.  

So, the COC ROI seems to be about 9.744%

Not as good as my stocks, but still not too bad.

However, my credit union says they can get creative with my financing and use my equity in my personal residence and/or rental homes to cover my down payment. If that happens, my debt goes up a lot more, but my monthly expenses go way down. 

It appears my monthly payment if I refi'd my down payment would be about $506/month.  

If I did that, it decreases my monthly cash flow to $436. 

Annually, that is $5232.  My only cost, I think, would be closing costs and I used $10K as that. 

That gives me a COC RIO of 52%.

However, I'm leveraged a lot and either my personal home would be at risk and/or my rental homes due to the home equity loan that would cover my down payment. 

The current property has 5- 1 bedroom apts that are all currently rented.  Most of these rents seem a bit below market value. 

Most of the commercial spaces are rented and include a church, bakery, beauty shop and an office with one current vacant office. I'm not familiar with commercial rent, so I don't know if these rents are cheap, fair or expensive. I can find that out though. 

Any help in analyzing these numbers is greatly appreciated by this RE newbie. 

Mark