Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 3 years ago, 02/18/2022

User Stats

18
Posts
3
Votes
James Lauer
3
Votes |
18
Posts

Need some help evaluating numbers on new 5 unit!!!

James Lauer
Posted

Hi everyone,

I am really hoping someone can help me with my evaluation, analysis and anything else you all feel is important for my new purchase of a 5 unit in New Jersey!

I really will try to keep this as short as possible, here are the numbers (current numbers and projected)

$1,150,000 Purchase price

$9,522 gross rent (4 residential, 1 commercial) currently the owner of the building, also owns the business in the commercial space and will do a leaseback for 5 years @ $4200 = $114,264

$12,500 taxes, $3200 insurance, $2750 W/S, $1800 maintenance = $23,996 expenses per year (from owner)

Based on what we see in the market right now, our projections for this unit once totally renovated/stabalized will be:

$7,400 Gross monthly rent from residentials

$4,200 Gross monthly rent from commercial

= $11,600 Gross monthly rent

We expect to spend about $150,000 - $200,000 on renovations, this will cover all exterior upgrades, total renovations of 4 residential units and some miscellaneous.

Up until now, my largest purchase has been a 3 family, so I have always done cash out refi with 30 year fixed. This will be the first time getting a commercial loan, thus I am a little wet behind the ears in this area. 

My plan was to buy this with a 20-25% conventional loan to start. After we stabilize it, go back to our bank or another bank, ask for new appraisal and refinance. Based on some comps and rental projections, we feel we should easily be in the 1.5 - 1.8 million range after renovations (comps aren't easy to come by in this area). What do commercial banks generally loan up to? We are aware and prepared to leave about 150,000 to $250,000 invested in the deal as we should be cash flowing around $3000x each month after we are stabilized and this accounts for capex, vacancy and all the normal expenses.

I am curious if anyone has an tips, suggestions and pointers for me. My biggest area of confusion and trepidation is around the commercial lending and what banks generally allow for!

Thank you so much for all the replies!

James Lauer 

Loading replies...