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Updated over 5 years ago,
First time investor looking for a check on expenses
I've only analyzed a few packages thus far and would like some feedback from those with experience.
I found a 6-unit, C class property in NC selling for $222K with a 9.7% cap. All units are 2bed/1bath. The actual rent roll shows three of the units rent for $450 and the other three rent for $395, which puts an annual gross of $30,420.
From what I've read on numerous places, multifamily expenses range from 45-55% of gross income. However, these expenses are only ~ 10%, which should be a sign of missing/understated expenses. They seem to have most of the expense categories included. My problem is I don't know if the values they list are realistic or understated.
insurance | $2,285 |
landscaping | $300 |
management | $1,606 |
professional | $200 |
property taxes | $2,190 |
maintenance | $4,155 |
utilities | $19 |
total | $10,755 |
I need to know if these expenses are reasonable before I decide if/what to offer.