South Milwaukee 4Plex Analysis

[Adam Kozuch]

Hey BP,

I currently own one 4 unit multifamily in Bay View and am looking to purchase another building with my brother. Short term he and his fiance plan to owner occupy with the long term strategy being buy and hold. I have been running analysis on many properties and I think I found one where the numbers are slightly better than the rest and am looking for a sanity check! 

The property is located in South Milwaukee, Southeast of the airport. All feedback/input is appreciated.

Purchase Details

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Purchase Price = 150,000

Closing Costs = 4,500

Renovations = ? Haven't had the property inspected yet.

Down Payment ($) = 30,000

Down Payment (%) = 20

Interest Rate (%) = 5

Years = 30

Income (Monthly / Yearly)

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Units = 4

Rent = 2,430 / 29,160

After Vacancy = $2,235.60 / $26,827.20

Expenses (Monthly / Yearly)

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Property Tax = 466 / 5,592

Management Fee (11%) = 220 / 2,640

Insurance Estimate = 200 / 2,400

Repair Estimate (5%) = 121.5 / 1,458

Vacancy Estimate (8%) = 192 / 2,332

Cap Ex (10%) = 243 / 2916

Results

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Cash Required = 30,000

Loan Required = 120,000

Monthly

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Income = 2,430

Expenses = 1,442

Financing = 555.74

Net Income = 432.26

Yearly

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Income = 29,160

Expenses = 17,304

Financing = 6,668.88

Net Income = 5,188

Capitalization = 7.9%

COCR = 17.29%

[Brandyn Dietman]

At a minimum it needs a new roof on the house and garage, garage doors should be replaced, has water in the basement and most people are smoking in the units.