First time Investing in Inland Empire Area - Need help evaluating

[Madhav Chhura]

Hi Bigger Pocket Folks!! 

I am new to real estate investment. I have been educating myself on how to evaluate properties and invest in rental properties by reading books, listening to the podcasts and following the forum. I also started crunching numbers daily for properties to get better at evaluating deals.

I am reaching a point where I need some specific guidance. My goal is to invest in the Inland Empire area of California. The search began with the city of Fontana, CA.  What I soon realized that most of the properties I run my numbers have very low cap rates or are barely cashflow positive. So I am reaching out to the Bigger Pockets community to help me look at my calculation as to if I am being very conservative with my numbers which is causing me to not see much positive cashflow.

I would love to get your thoughts on why I am not seeing a positive cash flow on most of the properties in Fontana. Also are there any guides you guys recommend using to help determine what is good cap rate and cash on cash ROI?

Also, this is one of my first posts so I am not supposing to asking something here please let me know and I can remove my post. 

Here are some properties I ran the numbers on. 

Property # 1

0  Advanced issue found

Purchase price	$700,000.00
Purchase Closing costs	$10,000.00
Repairs	$30,000.00
Holding Costs	$5,000.00
Down Payment Percent	20%
All Personal Contributions (down payment)	$185,000.00
Total Investment	$745,000.00
Total Loan Amount	$560,000.00
Number of units	4
Average Rent per unit	$1,200.00
Total Loan Amount	$560,000.00
Interest Rate	3.80%
Term Length of Loan ( in Months)	360
Interest Rate per month	0.003166666667
Total monthly mortgage payment	$2,609.36
Monthly Insurance	$150.00
Monthly Property Taxes	$700.00
Other Monthly Expenses (HOA, Utilities, Maintenance, Etc)	$333.00
Repairs (8%)	$384.00
Vacancy (10%)	$480.00
Total Monthly Expenses (not with mortgage)	$2,047.00
Total Monthly Expenses (with mortgage)	$4,656.36
Other Monthly Income	0
Total Gross Monthly Income (Rent)	$4,800.00
Total Annual Expenses (not mortgage)	$24,564.00
Total Gross (Most Possible) Annual Income	$57,600.00
Net Operating Income ($ left to pay mortgage)	$33,036.00
Cap Rate (for multifamily/commercial)	4.72%
VALUE BASED ON CAP RATE	$700,000.00
Cashflow per month	$143.64
Annual cashflow average	$1,723.67
All Personal Cash Contributions	$185,000.00
Annual cashflow	$1,723.67
Annual “cash on cash” Return on Investment	0.93%

Property # 2 

0  Advanced issue found

Purchase price	$585,000.00
Purchase Closing costs	$7,000.00
Repairs	$20,000.00
Holding Costs	$3,000.00
Down Payment Percent	20%
All Personal Contributions (down payment)	$147,000.00
Total Investment	$615,000.00
Total Loan Amount	$468,000.00
Number of units	3
Average Rent per unit	$1,227.00
Total Loan Amount	$468,000.00
Interest Rate	3.80%
Term Length of Loan ( in Months)	360
Interest Rate per month	0.003166666667
Total monthly mortgage payment	$2,180.68
Monthly Insurance	$100.00
Monthly Property Taxes	$516.00
Other Monthly Expenses (HOA, Utilities, Maintenance, Etc)	$300.00
Repairs (5%)	$184.05
Vacancy (10%)	$368.10
Total Monthly Expenses (not with mortgage)	$1,468.15
Total Monthly Expenses (with mortgage)	$3,648.83
Other Monthly Income	0
Total Gross Monthly Income (Rent)	$3,681.00
Total Annual Expenses (not mortgage)	$17,617.80
Total Gross (Most Possible) Annual Income	$44,172.00
Net Operating Income ($ left to pay mortgage)	$26,554.20
Cap Rate (for multifamily/commercial)	4.54%
VALUE BASED ON CAP RATE	$585,000.00
Cashflow per month	$32.17
Annual cashflow average	$386.04
All Personal Cash Contributions	$147,000.00
Annual cashflow	$386.04
Annual “cash on cash” Return on Investment	0.26%