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Updated almost 5 years ago on . Most recent reply
DID I ANALYZE THIS RIGHT for CRE Multi Family?
Hello BP family, hope all is well with you and y'all families with this self-quarantine? I'm still learning how to analyze deals for CRE multi- families units. Wanted to see if I analyzed this deal right? I live in So Cal too.. This is a lot of information I'm about to type, but I got time today..(LOL) I analyze deals everyday, so I can get use to it.
I'm doing the income approach?
Number: Offering price 2.5M, 12 Units 100% occupied Price Per unit is 208,333
Mortgage info: 2.5M X 25% Down Payment= $624,932
loan info: $1,875,068 loan amount X 4.5% interest rate =$84,378 Annual Mortgage (Interest Only) 30yr Amortization?
Acquisition cost $624,923 down payment + $75,000 Closing Cost +$25,000 Acquisition Fee 1% Fee + Rehab?= $724,932
Total Acquisition is $724,932 ( I don't know my rehab costs or Cap Ex issues)?
Yearly mortgage break down: $84,378/12 Months = $7,031 Monthly
Total Gross Income: $230,256+23,496=$253,752-10% Vacancy= $228,377
Expenses are $44,204 New Taxes are $50,000 = $94,204 Total Annual Op EX...
Total Gross Income $228,377-Yearly Expenses $94,204= NOI $134,173
Total Annual income: $228,377-Total Annual Expense $94,204 - Total Annual Debt Service $84.377= Cash flow $49,622
cap rate= 5.3% NOI 134,173/selling price 2.5 M=5.3%
Cash on Cash= 6.8% Cashflow $49,627/Acquisition cost $724,932= 6.8%
DCR=1.59% NOI 134,173/ Annual Debt Service $84,378= 1.59%..
HOPEFULLY I DID THIS RIGHT?!?!?!?
I'm learning from RE-mentors from David Lindahl. I paid $1,500 bucks to attend a three days seminar over the summer of 2019, but they wanted 40,000 grand to team up with a sponsor and learn from someone in the business already ( I don't have 40 Grand laying around, just yet). The numbers RE-mentors wanted us to focus on are Cap rate of 8%, Cash On Cash of 12% or higher and a DCR of 1.6 minimum. I learned a lot from the seminar and I been learning it on my own ever since than... At a meetup, someone told me about bigger pockets and haven't stop listening to they old podcasts in my car, and home.. This is my three post...
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#2 Land & New Construction Contributor
- Developer
- Charlottesville, VA
Originally posted by @Dexter Harris:
Hello BP family, hope all is well with you and y'all families with this self-quarantine? I'm still learning how to analyze deals for CRE multi- families units. Wanted to see if I analyzed this deal right? I live in So Cal too.. This is a lot of information I'm about to type, but I got time today..(LOL) I analyze deals everyday, so I can get use to it.
I'm doing the income approach?
Number: Offering price 2.5M, 12 Units 100% occupied Price Per unit is 208,333
Mortgage info: 2.5M X 25% Down Payment= $624,932
loan info: $1,875,068 loan amount X 4.5% interest rate =$84,378 Annual Mortgage (Interest Only) 30yr Amortization?
Acquisition cost $624,923 down payment + $75,000 Closing Cost +$25,000 Acquisition Fee 1% Fee + Rehab?= $724,932
Total Acquisition is $724,932 ( I don't know my rehab costs or Cap Ex issues)?
Yearly mortgage break down: $84,378/12 Months = $7,031 Monthly
Total Gross Income: $230,256+23,496=$253,752-10% Vacancy= $228,377
Expenses are $44,204 New Taxes are $50,000 = $94,204 Total Annual Op EX...
Total Gross Income $228,377-Yearly Expenses $94,204= NOI $134,173
Total Annual income: $228,377-Total Annual Expense $94,204 - Total Annual Debt Service $84.377= Cash flow $49,622
cap rate= 5.3% NOI 134,173/selling price 2.5 M=5.3%
Cash on Cash= 6.8% Cashflow $49,627/Acquisition cost $724,932= 6.8%
DCR=1.59% NOI 134,173/ Annual Debt Service $84,378= 1.59%..
HOPEFULLY I DID THIS RIGHT?!?!?!?
I'm learning from RE-mentors from David Lindahl. I paid $1,500 bucks to attend a three days seminar over the summer of 2019, but they wanted 40,000 grand to team up with a sponsor and learn from someone in the business already ( I don't have 40 Grand laying around, just yet). The numbers RE-mentors wanted us to focus on are Cap rate of 8%, Cash On Cash of 12% or higher and a DCR of 1.6 minimum. I learned a lot from the seminar and I been learning it on my own ever since than... At a meetup, someone told me about bigger pockets and haven't stop listening to they old podcasts in my car, and home.. This is my three post...
The lenders have changed requirements now and are lowering LTV to 65-70% in many markets, requiring 12-18 months reserves for PMI as well as net worth requirements etc. You also need to fact at least 25% vacancy in you underwriting right now due to the economic environment right now. The rules are changing almost daily.