a 5 apartment building

[Tony Sepassi]

Hey Guys.

I found an apartment around $925K with a 5.36% cap rate out of state. I wanted to get some feedback from experienced investors on how to reduce the loan amount each year to pay less monthly payment..

It shows if putting 25% down that is $231K and  a loan for $693,750.   30 years at 4.25

The NOI is $49,560 and the projected debt service is $40,954 the cash on cash is 3.72% then

So before tax cash flow is $8606

Doesn't seem like a good deal and how can the monthly loan payment be reduced?  I usually see articles on how someone bought an apartment building and the next year or two then bought another one but with the low cash flow not sure how they do it other than find other investors?

Thanks!

[Jeffery Wilen]

Only way to reduce the monthly payment is a lower loan value, ie higher down payment (with resulting lower CoC return) or pay less for the property.
This isn’t a deal I’d be interested in doing, unless there is lots of upside for rent increases.