7 unit deal analysis

[David K.]

Hey Guys-

Let me know your thoughts.  7 units, all one beds.  In good overall shape,  lots of hardwoods.  All separate heating systems installed in 2014.  Parking for each unit and building is in a very good area.  Price is 340k. Putting down 68k. I'm looking at rents of $4750, which are low.  Market rents would bump this up to $5250.  Mortgage, tax, water, sewer, trash, utility, snow plowing combined cost is $3250.

Yes or No?

[Bob Razler]

Hello @David K.  

That's good.

You should also allow for vacancy in your revenue projections.  That would be another 5% ($475).

Adding that in it looks like some good numbers.

If you jack expenses up to 50% of income (rule of thumb) it still looks like it is still throwing off $800 a month. That would be a 13.27% COC.

All this is predicated on the rent and expenses you gave.

Bob