Need help interpreting financial information for multi family

[Jack B.]

This is what I see on listings on Redfin, apartment complex for just under 5 million

Net operating income, is that after expenses but before debt service? I used to know this stuff but forgot as I stopped looking at MF long ago.

Gross adjusted income? Adjusted by what?

What rent multiplier is a good rent multiplier?

The insurance expense must be monthly not annual, I pay 1/3 of that for a half million dollar house, let alone for a 5 million dollar apartment complex...

Multi-Family Financial Information

• Insurance Expense: $2,967
• Other Expense: $57,403
• Net Operating Income: $262,468
• Gross Adjusted Income: 377602
• Gross Scheduled Income: $397,476
• Total Monthly Income: 33123
• Gross Rent Multiplier: 12
• Total Expenses: 115134

[Bjorn Ahlblad]

My experience is numbers in a listing are generally wrong or manipulated to look favorable. NOI is after expenses and before debt service. Gross adjusted income is pretending all units are rented. Gross rent multiplier measures how many years it would take for the property to pay for itself with gross rents. The lower number of years the better. Jack, like many/most MF properties in our area my feeling is that property is overpriced and with proper numbers it will get worse.

Financing is onerous someone will need net worth equal to loan amount. 25% down and 5.5% interest. You will need a signed up PM. You will need reserves of 12 mos on deposit. All the best!