Your criteria for a new MF investment property?

[Alexander Alguire]

I am looking to do my first investment soon and am right now just looking for properties to run analysis on. What is the criteria you use to filter out good deals from bad ones? As far as price goes I find some with a great price, but due to age and upkeep who knows what the true cost would be. 

[Saran Mandhadapu]

@Alexander Alguire

Good Luck. Add the total INCOME from all units (including any laundry and storage income)

Add all expenses (listed below).

Income - Expenses = Net Operating Income (NOI)

NOI - Debt Service = Monthly Cash Flow

Debt Service = Monthly/Yearly mortgage payments

(Annual Cash Flow) / (Cash Invested) * 100 = Cash on Cash Return (10% or above should be good - Try for 15% plus)

Cash Invested = Down payment + Closing Costs (total money out of your pocket)

Cap Rate = NOI / Property Value (8% or above should be good - Try for 10% plus)

Bank Charges

Advertising

Insurance Hazard

Janitorial

Legal

Licenses

Miscellanious

Repairs and Maintenance

Supplies Maintanence

Taxes - Property

Vacancy Loss (usually 5% to 8%)

Property Management (usually 10%)

CapEx (any future big ticket item replacements like Roof, HVAC, Floors etc) -- may be 5% to 10%

Water/Sewer

Electricity

Gas

Fuel Oil

Other Utilities