Multi Family Home 5-Year Return Analysis for Orange County

[Jefferson Kim]

https://docs.google.com/a/anaheimparkhotel.com/spreadsheet/ccc?key=0Ar8ivt6iydY7dDExcGxrbjAtMnlaRzRHTWN5bjBUeEE#gid=1

I'm currently looking through Orange County for fourplexes to purchase and have created a spreadsheet to help me analyze properties for potential returns side-by-side.

Can anyone tell me if I'm missing any major expenses or if any of my data seems a bit off for the area?

I'm trying to be more on the conservative side of things as I want to be realistic on my returns and because I have to present this information to some potential partners. Some of my assumptions:

- 1 out of 12 months will be vacant
- 25% Down Payment at 4.25% APR
- 2.0% average rent increase per year (though, that's even questionable in the historical data I've seen in Anaheim)
- 30% of Collected Rent as Expenses

I'm aiming for at least a 15% return annualized over five years, including selling the property. I'm a little disappointed in my projected potential returns as investing simply in REIT averages a return of 12.32% over the past 10 years, and you don't have to do ANY work!

http://www.msci.com/products/indices/country_and_regional/domestic_equity_indices/reit/performance.html