Mid size residential unit deal analysis

[David K.]

Hey Guys-

Trying to figure out if I should make a move on this one.  12 single bed units, in a large well kept building.  One heating system (owner pays).  Each unit has been upgraded, electrical upgraded, roof less than 10 years old.  Going thru the building I'd say its in no worse than average condition, for this demographic the units will work fine.  Currently 8 of 12 units are on one year leases for $850 per month, but still represents a 33% vacancy.  There is only street parking, which is partly to blame for only 8 units being full I believe. (parking always helps, but not always necessary from my experience).  There's also coin op income, but I never have generated all that much with that, so I never account for it.  With 200k down the debt servicing would be $3,877 monthly.

List price is 800k.  Fully rented its $122,400 yearly, but with only 8 units rented yearly the rents are only $81,600.

Mortgage $46,524

Rents  $81,600

Taxes $16,000

Insurance $6800

Trash $1,200

Water/sewer $8,000

Utilities $8,000

Landscape/Snow $500. (basically just shoveling walkways etc)

Looking at $87,024 in expenses before cap ex, maintenance and management.  A loss for sure!  Wondering where I'd need to be to make money on this........area is starting to turn around but at this price or even 10% less it still doesn't seem to work.  Am I missing something?