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Updated almost 11 years ago on . Most recent reply

Thoughts on this 14 unit case study?
Please lend me your thoughts on this 14 Unit I am working on.
They are all 1 bedroom units. Separate Furnaces in each unit. Well Water
Let me know if you have other questions.
Thanks in advance
Most Popular Reply

Hey Tom,
I am a multi family investor also. I looked over your deal and had some thoughts.
Your overall ROI looks good - you are over 10% in year 1 which is a good start.
1. I didn't see a line item for capital expenditures - setting money aside each month for things like roof replacements, new furnaces, major renovations, etc... AKA things you would claim as a capital expense on your taxes and write off over years versus a line item expense in one year. I typically write in around $400 per unit per year for Cap Ex.
2. Your maintenance seems like a good number. Did you plan on having a superintendent in the building, and if so is that included?
3. I didn't see a leasing commission, unless you are planning on doing that yourself.
4. The taxes are really low, I am jealous as we are in New Jersey and pay around $4000 per unit here!! :-)
5. I think you can get a better interest rate than 5.5% on a 20 year fixed. We just got 4.18% over 30 years on an 18 unit. I normally go to small community banks as you can usually meet directly with the decision maker and they have more favorable and negotiable terms.
Those are my thoughts after a brief overview of your numbers, I hope that helps. Good luck with the deal!!
Matt Faircloth