4 plex analysis - review my numbers

[Craig Montesano]

4 - 1 bedroom apartments
asking price - $110,000

Monthly rents total - $1,575
NOI - $18,900

Expenses
Taxes - $1,140
Ins. - $1,200 (still waiting on quote)
Water and Sewage $4000
Mgmt fee $1900 (if I use one)

Expenses - $8,240

Profit before debt payment - $10,660

selling price of $95 - with 25% down and a 4% rate - P&I would be roughly $340

10660 / 12 months = $888 - $340 is $548

Which in turn at $95 selling price gets me $137 / door.

Using the 50% rule ...If I am doing it right

$18900 / 2 = $9450
$9450/12=$787
$787 - $340 = $447
$447/4 = $111 / door

There are currently 0 vacancies and tenants pay all utilities.

I don't believe I forgot anything??

Any help or insight is much appreciated. Thanks!

[David Beard]

You need to get their Sch. E's for the last two years. This is likely not a "50% expense rule" property, more like a "60% expense rule" deal, with the 1BR units, low rent amounts, and owner paid water/sewer (whatever the correct amount turns out to be--would be about $2K/yr around here). If you're self-managing, then you can probably do it at 50%, but that is without "compensating" yourself for time spent.