Am I getting my small MF costs right?

[Kurt Hines]

Hi All. I'm looking at a couple multifamily properties in Northern Michigan (local to me). They don't seem like good buys, but I'm concerned that I may just have my expense numbers wrong. Below is one of them. Am I missing anything, or including something I shouldn't? Or including things in NOI that I shouldn't? I have one rental, but this would be my first multifamily

I'm doing a lot of numbers on these as practice, and plan on touring it next week. Even if nothing comes of it, it is a good learning experience!

6 total units (3 duplexes, Four 2-bedrooms and Two 1-bedrooms)

Asking Price 196k (Has been on the market for 14 months. I think they got the price by adding the potential retail price of each duplex, not calculating NOI against CAP Rates for the area (8-9%))

Current Gross Rents: $2,525, I think this could be stabilized to about $3,100.

Thanks!

Monthly Expenses
Cost Item	Cost	Estimate or Actual?
Included in NOI
Prop Taxes	$500	Actual, seems high, maybe could be lowered
Insurance	$238	Actual, number from Ins. Agent for Replacement cost, could insure at ACV
Water/Sewer	$170	Actual, a couple residents have Washers, would charge them for this.
Trash	$19	Actual
Electric	$0	Estimate, Tenants pay
Gas (for Heat)	$0	Estimate, Tenants pay
Landscape / Snow	$125	Estimate, large shared parking lot, lots of grass, lots of snow
Accounting / Tax	$50	Estimate
Legal	$30	Estimate
Vacancy/Loss 10%	$253	Estimate, number bank appraiser uses
Repairs & Maintenance 5%	$126	Estimate, appears to be very little deferred maintence, would be confirmed
Management 10%	$253	Estimate, would self manage, but to put against NOI
Total NOI Costs	$1,763
................................................
Not included in NOI
Financing	$606	Assuming an offer of 100k, 75% bank financing, 20% seller financing
CAPEX	$125	Estimate at $250/door/year, would be confirmed
Total Extra Costs	$731
................................................
Total Monthly Expenses	$2,495