ATTN: MA investors Coc Roi/Cap Rate - Taunton,MA

[Craig Fogarty]

Good Afternoon fellow investors!!

I'm contemplating putting an offer on my first multifamily (2 fam) and I need some guidance on the deal. It seems like cash on cash return and cap rates vary from area to area. I know Massachusetts is one of the hottest markets in the country right now so I want to make sure my numbers look good. What is a good cap rate and coc roi in Massachusetts and specifically the taunton area??? I'm using an FHA loan with a 2.75% fixed rate. I'll be using some cash up front to make some updates and adding coin op laundry. My fear is paralysis analysis and not pulling the trigger because I don't have enough information. The property is semi updated and sits in a decent/quiet neighborhood close to the center of town. The only thing I didn't really factor into my expenses was vacancy.

Any help is appreciated!!

Price: 305k

NOI: $23,112

COC ROI: 33.61%

Cap rate: 7.58%

Rents:

4br townhouse: %1800/month

1BR: $975/month

Monthly income:$2775.00

Monthly expenses:$2067.65

Monthly cash flow: $724.44

[Jonathan Bombaci]

It’s tough to get things in MA to meet the 2% rule but ww find things all the time that meet the 1% rule and cashflow with vacancy and PM accounted for. Duplex’s are tough to cashflow in MA though you may want to look at 3-4 families. Your numbers will look way better with the extra 1-2 units even with the extra acquisition cost accounted for. 

Tauntons is a interesting market @Michael Belmore an agent on my team lives in Brockton and knows taunton we’ll. I’d suggest holding out for a 3 unit if you can find them. 

Best,

Jon