lets evaluate a deal together (actual property attached)

[Thomas Dunleavy]

So i bought my first rental property recently and the next step is multi family. I think orlando is a great are between the disney employees and the rising demographic trends within the city. I'm still a few years away from that next step so I evaluating deals in the meantime made sense. That being said I saw the below property on loopnet. $70k net on say 240k down sounds pretty amazing. Let's figure out what's missing here... The first obvious thing is no property manager but obviously could be more from not seeing it in person. What do any experienced investors think?

https://www.loopnet.com/Listing/4715-S-Rio-Grande-Ave-Orlando-FL/15069380/

[Canesha Edwards]

@Thomas Dunleavy

I didn't conduct an in depth analysis, I just briefly looked over the loopnet information.  The first thing that jumps out at me is the 6% cap rate. Now, I don't know the Orlando market, but a 6% cap for a C Class property seems a bit high.  In my opinion the property is over-priced.

Also,  the proforma shows expenses as 22% of gross rents. This is usually never the case. Multi family expenses typically hover around 45-48% of gross rents.  If this is a C class property, there is bound to be deferred maintenance, make sure to account for this is your analysis. 

Just my two cents. 

I hope this helps. 

Canesha