Please, critique my math for Multi-Unit Investment

[Anna L.]

I wanted to start investing in multi-unit properties(5+), and before I jump in, I need to understand the basic math behind this type of investment.

I want to try with classic strategy of buying a value-add property, where I can increase the rent and decrease the expenses after acquisition. Basically, the goal is to do BRRR and pull as much cash out as possible after refinance.

Can you please look at the math example that I put together and critique it? Is it directionally accurate?

The biggest unknown for me right now is how the bank evaluates the property value after the increase of NOI. Do they use the same Cap Rate and that's how the value increases?

I know I missed the closing cost and the cost of potential rehab or expense related to efficiency improvement. So, anything that you can add from a real life example is highly appreciated.

FYI - my example is hypothetical, but I would love to hear from you if those numbers are even close to realistic in B-C type neighborhoods. 

Thank you!