Help analyzing 5-unit MFH

[Jeremiah T.]

Looking for help analyzing this property. First off, I'm working to get a "feel" of the neighborhood and the structural fitness of the building and I'm not done with that yet. 

Any pointers on this analysis? Also, is $12k a sound starting point to estimate for the work to sub meter the utilities out?

What else should I consider?

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5-Unit Multifamily

mix of urban and suburban tenants

Purchase: $118,000

Repairs: $5,000 (Guessing)

Closing: $6,000 (Guessing)

ARV: 125,000 (Total guess; need help)

DP: $23,600

Loan Amount: $94,400

20 yr amort.

Interest: 5.8% (higher??)

P&I: $665.46

MONTHLY:

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Total Gross Rents: $4389

Monthly Expenses: $3583.05

Cashflow: $805.95

EXPENSES:

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(** Landlord pays utilities)

P&I: $665.46

Vacancy: $438.90 (10%)

Repairs: $131.67 (3%)

CapEx: $219.45 (5%)

Property Management: $438.90 (10%)

Insurance: $199.00 (2016 Actual)

Management: $438.90 (10%)

Property Taxes: $177.67 (2016 Actual)

** Electricity: $834.00 (2016 Actual)

** Water & Sewer: $165.00 (2016 Actual)

** Garbage: $83.00 (2016 Actual)

** Gas: $130.00(2016 Actual)

** Sewer: $100.00 (2016 Actual)

OTHER:

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2% rule: 3.40

DCR: 2.21

NOI: $17,656.96

Monthly cash flow: $805.95

Cash on Cash: 27.95%

[Andrew Johnson]

@Jeremiah T. Just guessing here but if you have a $25K per unit apartments you're going to incur more than 3% maintenance and likely more than 5% for cap-ex.  The repair budget of $5K suggests mostly cosmetic issues so that's not going to take into account roofing, plumbing, parking areas, etc.  Basically, you're missing out on the "big" expenses.  At $25K per unit you're probably also buying an older building so that just increases my suspicion that your expenses will be higher than you project.

As for submetering, good luck guessing on that one.  It's often a city-by-city deal but if you can't do it I think your estimate is okay.  It's usually (I love being vague) easier to do it with electric and gas than it is water.  With water you also have the fun of an additional meter because rents don't pay your landscaping water bill.  You also get to scratch your head on what happens with rent levels if you're (all of a sudden) passing those through to your tenants.

None of this is to say it's a good vs. bad deal but just to maybe lend some perspective.