Help analyzing a 5-unit Deal

[Leo Maldonado]

Hi Everyone, 

I am looking to do my first commercial deal. I currently own residential multifamily and I want to get into commercial due to the scale you can get and Control Value. 

In order for my strategy to work though, I need to be able to secure the correct first deal: Value add 5-Unit under $500k

The goal would be to force appreciation, elevate cap rate, and flip the building to another investor. Profit, 1031 exchange into a larger deal.

The reason for this price is I am shopping on what I can put down for a down-payment WITH a partner. 

With that being said, here's the deal:

Purchase Price: $475,000

Cap Rate: 8.3%

Unit Mix

2/1- $900

1/1- $900

1/1- $875

1/1- $850

1/1- $800

Total: $4325/M  $51,900/Y 

----------------------------------

Maintenance

Insurance: $184.39/M 

Electric: $18

Water: $50

Garbage: $160

Taxes: $464.39

Common Areas: $150

Total: $1,026.64/M  $12,319.68/Y

Total Units: 5

Total Sq Ft. : 3,000