how do i determine what the apartment will cash flow?

[Account Closed]

if i have a property for $5.6MM and the NOI is 320k. Is there a fast way to get a rough estimate on what it will cash flow?

does it all depend on the type of financing? 15 year vs 30 year would completely change that right?

[Andrew Johnson]

@Account Closed If you're NOI is $320K you still have to take into account cap-ex holdbacks and (potentially) management fees. It's easy to "massage" the NOI if you choose to replace an appliance instead of repair it, etc. So (for more simple math) let's assume it's $320K * 2 = $640K gross rents and you allocated 10% to cap-ex. You end up with $320K - $64K = $256K or $21K per month.

Then you assume that $5.6MM needs 25% down and you get $4.2MM in debt at a 5% (just for easy math) interest rate.  I can't imagine you'll get a 30 year fixed rate, it will be either 15, 20, or 25 years when it comes to an amortization table.  So monthly it's:  $33K, $28K, or $24.5K.  In any of those scenarios you're upside down when it comes to cash-flow.

Now you can mess around and *hope* that you won't have an cap-ex issues but when you do it's going to kill cash-flow for literally years.