Help! - 16 Unit Analysis

[Tyler Miller]

Hi Everyone!

I am looking at a 16-unit property and wanted to put the details out there. It doesn't seem like it makes sense, but I just want to to make sure I'm not missing anything here. I am fairly new to multifamily investing. Thanks in advance!

Asking Price: $575k

Income:

Gross Rent: $8000 (fully occupied)

Laundry Income: $175

P&I: $3225.53

Vacancy: $817.50 (10%)

CapEx: $408.75 (5%)

Repairs: $817.50 (10%)

Management: $800 (10%)

Taxes: $416.67

Garbage: $90

Water/Sewer: $80

Insurance: $672 (Replacement cost valued at about 900k)

Misc: $355 (Pest Control/Lawn)

This obviously doesn't make sense at asking, 6.6% ROI, ~$500 cashflow. Even at $500k purchase (unlikely), it is $912/mo cashflow ($57/door)

Thoughts?

[Jonathan Soto]

Misread the 8k, thought it was 80k. Are rents below market? Does the property have deferred maintenance which you will need to fix upon purchase? with that cash flow I will stay away. Water bill looks very low for a 16 family and you will see higher expenses. Numbers talk and it is either find a number you will cash flow and make an offer. or move on to the next deal. Best of luck